Samsung to cough up third of a billion bucks for ripping off patent

Samsung Electronics has been stung for more than $303 million in a patent infringement case brought by US memory company Netlist.

Netlist, headquartered in Irvine, California, styles itself as a provider of high-performance modular memory subsystems. The company initially filed a complaint that Samsung had infringed on three of its patents, later amended to six [PDF]. Following a six-day trial, the jury found for Netlist in five of these and awarded a total of $303,150,000 in damages.

The exact patents in question are 10,949,339 ('339), 11,016,918 ('918), 11,232,054 ('054), 8,787,060 ('060), and 9,318,160 ('160). The products that are said to infringe on these are Samsung's DDR4 LRDIMM, DDR5 UDIMM, SODIMM, and RDIMM, plus the high-bandwidth memory HBM2, HBM2E and HBM3 technologies.

The patents appear to apply to various aspects of DDR memory modules. According to reports, Samsung's representatives had argued that Netlist's patents were invalid because they were already covered by existing technology and that its own memory chips did not function in the same way as described by the patents, but this clearly did not sway the jurors.

However, it appears that the verdict did not go all Netlist's way because its lawyers had been arguing for more damages, saying that a reasonable royalty figure would be more like $404 million.

In the court filings [PDF], Netlist claims that Samsung had knowledge of the patents in question "no later than August 2, 2021" via access to Netlist's patent portfolio docket.

The company states that Samsung and Netlist were initially partners under a 2015 Joint Development and License Agreement (JDLA), which granted Samsung a five-year paid-up license to Netlist's patents.

Samsung had used Netlist's technologies to develop products such as DDR4 memory modules and emerging new technologies, including DDR5 and HBM, Netlist said.

Under the terms of the agreement, Samsung was to supply Netlist certain memory products at competitive prices, but Netlist claimed Samsung repeatedly failed to honor these promises. As a result, Netlist claims, it terminated the JDLA on July 15, 2020.

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Netlist alleged in its court filing that Samsung has continued to make and sell memory products "with materially the same structures" as those referenced in the patents, despite the termination of the agreement.

According to investor website Seeking Alpha, the damages awarded are for the infringement of Netlist technology covering only about five quarters. The website also said that Netlist now has the cash to not only grow its business but pursue other infringers of its technology.

Netlist chief executive CK Hong said in a statement that the company was pleased with the case. He claimed the verdict "left no doubt" that Samsung had wilfully infringed Netlist patents, and is "currently using Netlist technology without a license" on many of its strategic product lines.

Hong also claimed that it was an example of the "brazen free ride" carried out by industry giants against intellectual property belonging to small innovators.

"We hope this case serves as a reminder of this problem to policymakers as well as a wakeup call to those in the memory industry that are using our IP without permission," he said.

Samsung Electronics told The Register: "We will review the jury verdict and will make our arguments before the court."

Netlist is also understood to have other cases pending against Micron and Google. Those against Micron are said to involve infringement of many of the same patents that were involved in the Samsung case. ®