GOOGL - Netlist falls amid patent fight with Micron Samsung and Google (update)

2023-06-08 11:11:00 ET

Update 11:10am : Updates shares, adds background.

Memory company Netlist ( OTCQB:NLST ) dipped 4% on Thursday as a trial was instituted in a patent dispute with Micron ( NASDAQ: MU ) on Wednesday.

The Patent Trial and Appeal Board said that there's a reasonable likelihood that Micron will be able to establish that a claim of Netlist's patent suit (know as the '912 patent) is unpatenable on Wednesday. The shares ticked down 2.4% in regular trading on Wednesday.

The patent infringement claim is related to printed circuit boards, memory modules and double-date-rated, or DDR, memory.

The decision may be a setback for Netlist, which recently won $300M in damages in a similar patent fight against Samsung ( OTCPK:SSNLF ) and has an ongoing dispute with Alphabet's Google ( GOOG ) ( GOOGL ).

"The real news today is that claim 16 of the 912 patent, which is the only claim against Google, has now been instituted," Michael D. Cohen, director of research at MDC Financial Research LLC, told Seeking Alpha in an interview. "This will stand even if Samsung is time barred (no longer enforceable due to time passed) in the case."

"We continue to believe that this news may be negative for the share price of Netlist," Cohen wrote in a note to clients.

The PTAB's decision means that Netlist's case against Google ( GOOGL ) in the Northern District of California will remain stayed (halted), Cohen explained. Netlist ( OTCQB:NLST ) first filed the complaint against Google ( GOOGL ) in 2009.

Netlist shares surged 52% over two days in late April after the Samsung $303 million award.

"The trial clearly highlighted the tremendous value of Netlist's patents and the unique solutions we provide," Netlist ( OTCQB:NLST ) CEO C.K. Hong said in April on the company's Q1 conference call . "In fact, the jury saw evidence confirming that under oath many Samsung engineers could not point to a single commercially viable alternative for making the infringing products other than relying on Netlist's patented technologies."

Samsung and Netlist ( OTCQB:NLST ) have been battling over rights to patent memory module technologies since a 2015 joint development and licensing agreement encountered some problems about three years. Netlist ( OTCQB:NLST ) formally ended the licensing agreement in mid-2020.

More on Netlist

• Netlist Wins Over $300 Million From Samsung In The First Of A Series Of Patent Infringement Lawsuits
• Netlist: Key Upcoming Catalysts
• Netlist: Losses Are Mounting And More License Fees Seem Unlikely

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