Samsung Electronics, which had faced the threat of 400 billion won (US$295 million) in compensation due to a patent dispute with American semiconductor firm Netlist, can now breathe a sigh of relief.
According to industry sources on Oct. 18, the U.S. Federal Ninth Circuit Court of Appeals recently reversed a previous ruling that favored Netlist in a memory patent infringement case filed against Samsung Electronics. The appellate court has sent the case back to the district court for further consideration.
The Appeals Court stated that “further examination of the contract details and the facts is required,” overturning Samsung’s alleged breach of supply obligation. Moreover, the court rejected the claim that “Samsung Electronics cannot be seen as having breached the obligation related to withholding tax collection.”
Previously, in May 2020, Netlist had alleged that Samsung Electronics violated both their mutual development and patent license agreement in terms of supply obligations and withholding tax collection duties. Subsequently, they claimed the company’s contract was lawfully terminated and filed a lawsuit in the Central District Court of California.
In February 2022, the Central District Court of California had acknowledged Netlist’s claims, leading Samsung Electronics to appeal.
Netlist, emphasizing the lawful termination of the licensing agreement, has been in ongoing patent infringement litigation against Samsung Electronics not only in the U.S. but also in countries like Germany.
Last August, the Eastern Federal District Court of Texas had ruled in favor of a jury verdict in the patent infringement case brought by Netlist against Samsung Electronics. They ordered Samsung to pay damages amounting to US$331.5 million.
With this reversal, the patent infringement lawsuit between Samsung Electronics and Netlist enters a new phase. If Samsung Electronics ultimately prevails, it’s expected to impact other patent infringement lawsuits that Netlist has filed.
Netlist was founded in 2000 by Hong Chun-ki, a former executive from LG Semiconductor. The company had previously sued SK hynix in 2016 and 2017, alleging infringement of semiconductor technology patents, and had filed lawsuits with the U.S. International Trade Commission (ITC).
Meanwhile, following the results of the appellate court, Netlist’s stock price plummeted by nearly 30% within a day.