A Blow to SK Hynix
The United States International Trade Commission (ITC) has determined that SK Hynic infringed a patent of Netlist Inc., a U.S.-based producer of high-performance SSDs and modular memory subsystems.
According to a Netlist press release issued on Oct. 21 (local time), the chief administrative law judge (CALJ) of the ITC issued a notice of initial determination in its investigation of SK Hynix RDIMM and LRDIMM enterprise memory products.
According to the notice, the CALJ determined that SK Hynix violated Section 337 of the Tariff Act of 1930, with respect to U.S. Patent No. 9,606,907, one of Netlist’s two asserted patents, in importing into the United States and selling certain memory modules and components.
In order to find a violation of Section 337 of the Tariff Act, the ITC investigation must determine that there is infringement of a valid U.S. patent that relates to an imported product, where the patent is being used in an existing domestic industry.
The notice said there is no violation of Section 337 of the Tariff Act of 1930 as to U.S. Patent No. 9,535,623.
The notice includes a brief summary of the initial determination, with further details to be available in the coming days. A public version of the determination will be available within 30 days.
The ITC’s ruling deals a blow to SK Hynix, which has been suffering a continued decline in profits due to sluggish demand for memory products.
The ITC’s verdict was expected when it issued in September last year a “claim construction order” against SK Hynix in its investigation of the allegations that the Korean company's RDIMM and LRDIMM enterprise memory products infringed on Netlist's patents.
Claim construction refers to when a judge determines the meaning of disputed words in a patent infringement lawsuit.
At the time, Netlist's CEO C.K. Hong said in a press release, "We are very pleased with the order and believe this is an important turning point in our dispute with SK Hynix.”
"In our view, the claim construction order was thorough, well-reasoned, and vindicates our belief as to the strength of our fundamental IP. This interpretation of the patents puts us in a strong position with respect to infringement, which was the only issue we didn't win in our first ITC action. The order gives us significant momentum heading into the trials scheduled later this year in both the ITC and in Germany," Hong said.
The Netlist CEO said if the ITC sees the validity of the Netlist patent, it could order an import ban on SK Hynix semiconductors. The company filed a similar suit against SK Hynix in Germany and China.
The patent dispute between the two companies seemed to come to an end in April last year when an administrative law judge (ALJ) granted SK Hynix's motion for summary determination of non-infringement and decided to terminate the investigation.
But Netlist petitioned to have the investigation reopened. In May last year, the ITC accepted part of Netlist’s claim and sent the case back to the ALJ.
This time, the ALJ sided with Netlist on the key claim construction issues at the heart of the dispute.
The claim construction order serves as the framework from which the ITC will ultimately decide if the patents are valid and infringed by SK Hynix, and therefore represents a critical juncture in the case.