by Lyle Smith

Netlist Wins Major Legal Victory Against Diablo Technologies Pertaining to ULLtraDIMM SSD Case

Netlist has announced that the United States District Court for the Northern District of California granted Netlist's Motion for Preliminary Injunction against Diablo Technologies for controller chips used by SanDisk in its high-speed ULLtraDIMM SSD product line. As a result, this means that Diablo and SanDisk will be banned from manufacturing and selling the controller chipset used by SanDisk in the ULLtraDIMM as well as further sale and distribution of the ULLtraDIMM itself. The case was filed back in September of 2014.

Judge Gonzalez Rogers, who is heading the case, indicated that Netlist would “likely prevail” by showing that Diablo used the Netlist Technology to develop its controller chips. Rogers went on to say that Diablo was misusing the technology that had been given to them in confidence under the Supply Agreement with Netlist, which resulted in an advantage in the market it would not have otherwise attained. Furthermore, the Court decided that Diablo's “unlawful conduct” has harmed Netlist's endeavors to develop and sell the company’s NVvault and HyperVaultproducts. A permanent injunction may be issued after trial for the entire wrongful head-start period. Judge Rogers has also disregarded Diablo's claim had rights to use Netlist's technology under their agreements also rejected SanDisk's motion for reconsideration to be able to sell existing inventory of the products in question, indicating that both SanDisk and Smart Storage are actively in concert with Diablo. 

The Court has advanced the trial date by four months (now March 9th, 2015) for Netlist's claims, including claims against Diablo for trade secret misappropriation, breach of contract, and other causes of action related to the components supplied by Diablo for the ULLtraDIMM.  Additionally, the Court's order specifically identifies the ULLtraDIMM as well as the eXFlash modules from IBM, although the injunction affects all modules containing Diablo components. Other OEMs, including Huawei, Lenovo and Supermicro, have announced plans to offer ULLtraDIMMs in certain of their server platforms.

This news follows another important legal victory by Netlist pertaining to the dispute.  In December of 2014, the United States Patent and Trademark Office denied petitions filed by SanDisk, in which the company requested an Inter Partes Review of Netlist patents asserted against the ULLtraDIMM in a separate patent infringement suit filed by Netlist against SanDisk and Diablo. As a result, SanDisk and Diablo are both now forbidden from filing additional Inter Partes Reviews on the four Netlist patents with claims that the PTAB refused to review.

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