Netlist Wins $445 Million in Patent Violation Case

Netlist, Inc. NLST recently announced a legal victory in a patent infringement trial against Micron Technology MU and its subsidiaries (Micron Semiconductor Products, Inc. and Micron Technology Texas LLC).
The U.S. District Court for the Eastern District of Texas awarded Netlist a substantial $445 million damages award following a jury trial, which centered on two key Netlist patents - U.S. Patent Nos. 7,619,912 and 11,093,417. The products that were infringing the patent were all of Micron's DDR4 RDIMMs and DDR4 LRDIMMs.
The tribunal's unanimous verdict not only confirmed the infringement but also ruled that Micron had "wilfully infringed" these patents. The compensation granted covers the period from April 2021 to May 2024 for the '912 patent and from August 2021 to May 2024 for the '417 patent.
NLST highlighted that this legal win marks the second successful case in a relatively short period where a global semiconductor giant has been found to wilfully infringe Netlist's patents.
In 2023, Samsung was found guilty of wilfully infringing NLST's patent technologies, such as HBM and DDR5 that form the bedrock for generative AI computing. In terms of compensation, NLST received more than $303 million as a reasonable royalty for Samsung's violation of its patents for a short past damages period and pre and post-judgment interest in addition to costs.
Based in Irvine, CA, NLST is a leading designer and manufacturer of high-performance memory subsystems for OEMs across the globe. Its rich portfolio of patented technologies provides cost-effective solutions backed by top performance and high density. The patents are from the fields of, storage class memory, hybrid memory, rank multiplication and load reduction and others.
In the last reported quarter, NLST's net sales soared 297% year over year to $35.8 million, driven by solid momentum in the memory market. The top line beat the Zacks Consensus Estimate by 2.31%.
However, it reported a loss of 7 cents per share for the March quarter, the same as the prior-year figure. The loss was wider than the Zacks Consensus Estimate of a loss of 5 cents.
NLST currently carries a Zacks Rank #3 (Hold). The stock has lost 60.4% in the past year against the sub-industry's growth of 128.1%.

Key Picks

Arista Networks, Inc. ANET, sporting a Zacks Rank #1, is likely to benefit from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience.
Arista has a long-term earnings growth expectation of 15.7% and delivered an earnings surprise of 15.4%, on average, in the trailing four quarters.
Ubiquiti Inc. UI, carrying a Zacks Rank #2 (Buy) at present, is a key pick in the broader industry. Headquartered in New York, it offers a comprehensive portfolio of networking products and solutions for service providers and enterprises at disruptive prices.
UI boasts a proprietary network communication platform that is well-equipped to meet end-market customer needs. In addition, it is committed to reducing operational costs by using a self-sustaining mechanism for rapid product support and dissemination of information by leveraging the strength of the Ubiquiti Community.
NVIDIA Corporation NVDA, sporting a Zacks Rank #1, is another key pick in the broader industry. It is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. Over the years, NVDA's focus has evolved from PC graphics to AI-based solutions that now support high-performance computing, gaming and virtual reality platforms.

To read this article on Zacks.com click here.