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Infosonics Corp. Message Board

cherk_on 101 posts  |  Last Activity: 11 hours ago Member since: Aug 13, 2009
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  • The preliminary injunction has an IMMEDIATE impact on multi-billion dollar companies like Sandisk and IBM.
    Yesterday's Sandisk announcement of revenue miss and subsequent $3 billion drop in market cap was perfectly timed to the court's release of the preliminary injunction details.

    On top of that, you have The Wall Street Journal, PCWorld, and even theregister running articles explaining how big of a deal this preliminary injunction is. As people here knows, theregister was previously very bias against Netlist, now it looks like they have finally woken up. Anyone reading doc 277 will no doubt come to the conclusion that Diablo have close to zero chance of winning in a trial.

    Public opinion has changed. With the details and opinions from the federal judge from doc 277, the world finally know the truth!

    The word will continue to spread and the stock price will continue to go up until the market accounts for all the values of Netlist: Lawsuit settlements from Diablo / Sandisk / Inphi / Google, IP Licensing (LRDIMM and NVDIMM related patents) and future NVDIMM / HyperVault sales.

  • The #1 requirement for a preliminary injunction to be granted is that the one requesting the preliminary injunction is more likely to win the case.

    While we do not know exactly what was included in the preliminary injunction, doc. 256 provides some clues because it talks about SMART Storage / Sandisk fighting to have the injunction amended to exclude the existing inventory of Diablo’s integrated circuits already in their possession. Based on that, we can conclude that at a minimum Diablo is not allowed to sell any more of the chips involved in the lawsuit.

  • It's not just about the lost of ULLtraDIMM revenue here. It is also about a lost of reputation. For every week the preliminary injunction is in effect, Sandisk's reputation takes a bigger hit. Imagine you are one of the top hyperscale customers who spent the time to validate the ULLtraDIMM in their data centers and have a roll out plan in place and need those new servers with the ULLtraDIMM to meet their internal or customer needs! It's one thing to push that rollout date by a week or two... but by a few months or cancelled all together when a permanent injunction is in place!!! Would you trust Sandisk again even if they come up with a different product that does the same?

  • 1. Even if they can stay the preliminary injunction, who would buy ULLtraDIMM until the trial in March 2015 is decided. Additionally, Netlist can file another preliminary injunction based on the patent infringement case as well.

    2. When they get to "Trade Secret" trial in March, even if they get away with using Netlist technology to build ULLtraDIMM, what would be their defense for making Netlist Trade Secrets public?

    3. Even if they get away with making Netlist's trade secrets' public as well, and clear the "trade secret" case all together, ULLtraDIMM is still infringing on 7 Netlist patents. This would be the second lawsuit, which is referred to as the "patent infringement" case. Sandisk is in fact a party to the "patent infringement" case because they WERE selling the ULLtraDIMM.

    4. For the patent infringement case, Netlist can also file for a preliminary injunction.

    5. Even if the preliminary injunction is not granted, and they are successful in defeating Netlist in invalidating 3 out of the 7 patents through re-exams, ULLtraDIMM would still be infringing on 4 patents!

    6. Even if they can workaround 2 of the 4 patents, they would still infringing on 2 patents! The distributed architecture patent is pretty much bullet proof.

    7. Let's say by some miracle, they can workaround all the patents or get out of the "patent infringement" case relatively unscathed from a legal perspective. How much time and money would be lost to redesigning and requalifying a new version of ULLtraDIMM assuming anyone is still interested? Legal costs? Lost of reputation and customers? Could Diablo or its current management survive the battle? Can SMART Storage management survive the battle? How much revenue would be lost to competitors? How much market cap would be lost?

  • cherk_on cherk_on Jan 18, 2015 8:41 PM Flag

    Also keep in mind that ULLTraDIMM is the subject of a separate "patent infringement" lawsuit that Netlist filed against Sandisk/SMART Storage and Diablo. Since Netlist defeated Sandisk's IPR petition for a few key patents, Netlist could have filed for a preliminary injunction from that case as well! Any settlement in the "trade secret" case against Diablo would most likely settle the patent infringement case as well since it would obviously include a licensing deal. Therefore, payments would be coming from Sandisk and Diablo.

    There was some noise about what percentage of the settlement Netlist would actually get. The lawyers do NOT get a 1/3 of the settlement unless the lawyers were working on a "contingency fees" basis. There was no indication that Netlist lawyers were working on a contingency fee basis. For this type of lawsuits, it is very rare for lawyers to work on a contingency. As for Fortress's split, the higher the settlement, the lower the percentage their cut of the net total. Their cut is a percentage of the net amount (after all the legal fees are paid), not the gross settlement figure.

    Settlement in this lawsuit will likely trigger additional IP licensing, partnerships, and other lawsuit settlements. e.g. with Google and Inphi. As noted in another post, public opinion has already started to change. Netlist is now seen as legit.

  • 1. One of the primary reason that HyperCloud revenue isn't where we hope is because it was behind schedule which allowed LRDIMM to catch up. From recent court documents, we now know that it was because of Diablo. Diablo was behind schedule more than once. Makes one wonder whether that was intention on their part or not.
    2. If Diablo was not marketing and selling Netlist technology, companies like Sandisk would had been working with Netlist and HyperVault would be in production already, in place of ULLtraDIMM. Netlist share count would be even lower, not having to dilute as much.

    Sandisk is down and reputation suffering. Any competitor should take advantage of that. Buy Netlist and lock Sandisk out of this entire market altogether. Sandisk cannot recover from this due to the reputation lost and the lack of IP required to make an alternative product. If they even try, Netlist can file suit and no OEM will even bother with qualification if Sandisk's product.

    Wish I knew who Netlist's partner is on HyperVault and what move they will make next.

  • The examiner has came back with his final answer after the RAN.
    The answer was mailed out yesterday and the document was just uploaded minutes ago!
    Go check! Go Cherk! :)

  • cherk_on cherk_on Jan 15, 2015 6:43 PM Flag

    With this week's final answer from the examiner confirming 92 patentable claims for '912, we are one step closer to getting a settlement and licensing fee from Google. The Google lawsuit was stayed (put on hold) pending the completion of this re-exam. The next step will be oral arguments in front of the appeal board unless the latest event triggers settlement talks. Google and Inphi might choose to settle now before Netlist get financially stronger with settlements from Diablo/Sandisk. With 92 claims surviving attacks from the combined force of Google, Inphi, and SMART over the past few years, most objective people would conclude that Netlist has a very good chance of winning.

  • cherk_on cherk_on Jan 8, 2015 4:45 PM Flag

    Links to Craig-Hallum and Needham's research notes are both available on Netlist's website.

    Craig-Hallum:
    "...since we believe the UlltraDIMM product was an important aspect of SanDisk’s growth plans from flash SSDs in 2015, we believe it will likely drive settlement discussions with Diablo/SanDisk. Since SanDisk is viewed as a highly credible licensing company, we don’t believe they can be seen by customers as hypocritical as it relates to licensing IP. "

    Needham:
    " It is our belief that this could bring SNDK to the negotiating table rather than face the potential of losing at the trial. Consequently, we assume that a $25-50M settlement (at the low-end) could effectively double the market cap of NLST and therefore we upgrade to Buy from Hold..."

  • The 50+ Google patents that reference Netlist's 7,619,912 ('912) patent include:
    8,868,829 Memory circuit system and method
    8,819,356 Configurable multirank memory system with interface circuit
    8,811,065 Performing error detection on DRAMs
    8,797,779 Memory module with memory stack and interface with enhanced capabilites
    8,796,830 Stackable low-profile lead frame package
    8,773,937 Memory refresh apparatus and method
    8,762,675 Memory system for synchronous data transmission
    8,760,936 Multi-rank partial width memory modules
    8,751,732 System and method for increasing capacity, performance, and flexibility of flash storage
    8,745,321 Simulating a memory standard
    8,730,670 Embossed heat spreader
    8,710,862 Programming of DIMM termination resistance values
    8,705,240 Embossed heat spreader
    8,675,429 Optimal channel design for memory devices for providing a high-speed memory interface
    8,671,244 Simulating a memory standard
    8,667,312 Performing power management operations
    8,631,220 Adjusting the timing of signals associated with a memory system
    8,631,193 Emulation of abstracted DIMMS using abstracted DRAMS
    8,619,452 Methods and apparatus of stacking DRAMs
    8,615,679 Memory modules with reliability and serviceability functions
    8,601,204 Simulating a refresh operation latency
    8,595,419 Memory apparatus operable to perform a power-saving operation
    8,582,339 System including memory stacks
    8,566,556 Memory module with memory stack and interface with enhanced capabilities
    8,566,516 Refresh management of memory modules
    8,446,781 Multi-rank partial width memory modules
    8,438,328 Emulation of abstracted DIMMs using abstracted DRAMs
    8,407,412 Power management of memory circuits by virtual memory simulation
    8,397,013 Hybrid memory module
    8,386,833 Memory systems and memory modules
    8,386,722 Stacked DIMM memory interface
    8,370,566 System and method for increasing capacity, performance, and flexibility of flash storage
    8,359,187 Simulating a different number of memory circuit devices

  • Reply to

    "and it will be overturned anyday now."

    by criskush Jan 17, 2015 3:02 PM
    cherk_on cherk_on Jan 17, 2015 11:14 PM Flag

    Before the preliminary injunction was granted and the details made known to the public this week, Diablo probably had most of the world believing that they didn't do anything wrong. SNDK might not have known the details until it was too late. Public opinion was against Netlist before that as evidence by the lack of coverage by major media outlets until the preliminary injunction was granted. Remember how cocky Diablo sounded when they filed their now-thrown-out lawsuit against Netlist and how they responded when Netlist filed for the preliminary injunction? Only the truly believers here knew Diablo was full of hot air then. The only true thing Diablo said was that "Preliminary Injunctions, in general, are very difficult to obtain..." Well, guess what, Netlist was granted that 'very difficult to obtain' preliminary injunction because BadALiar was outed by the whistle-blower letter and the NDA agreement.

  • Reply to

    '912 = the good news keep on coming! Google is next!

    by cherk_on Jan 15, 2015 10:52 AM
    cherk_on cherk_on Jan 15, 2015 11:13 AM Flag

    Final answer: 92 claims patentable, 11 claims rejected.

  • Just another basher in disguise. No wonder he had nothing of substance to add.

  • Reply to

    extremely difficult to overturn

    by nlstsmallbutok Jan 15, 2015 10:57 AM
    cherk_on cherk_on Jan 17, 2015 8:53 PM Flag

    czuckrey, Netlist might hate Diablo, but I'm sure there is a $$$ price that Netlist is willing to settle at that will allow Diablo to remain in business and ULLtraDIMM to ship again. Either that or Diablo get bought out by Sandisk and then Sandisk negotiates with Netlist for a licensing deal or buy them out. Obviously it will be costly for Sandisk, but do they have a choice? It's not just about the lost of ULLtraDIMM revenue here. It is also about a lost of reputation. For every week the preliminary injunction is in effect, Sandisk's reputation takes a bigger hit. Imagine you are one of the top hyperscale customers who spent the time to validate the ULLtraDIMM in their data centers and have a roll out plan in place and need those new servers with the ULLTraDIMM to meet their internal or customer needs! It's one thing to push that rollout date by a week or two... but by a few months or cancelled all together when a permanent injunction is place!!! Would you trust Sandisk again even if they come up with a different product that does the same?

  • cherk_on cherk_on Jan 18, 2015 11:22 PM Flag

    Let's also not forget that it is harder to get a preliminary injunction than to win the actual case. Some of the claims can probably be decided by the judge without even going to the jury. Bottom line, Netlist is almost certain to win the lawsuit.

  • Reply to

    Yvonne has some bandwidth now

    by buffalojoe689 Dec 17, 2014 8:23 AM
    cherk_on cherk_on Dec 17, 2014 9:08 AM Flag

    Since Netlist actually develops and market competing products unlike a patent troll, they can have a more convincing argument related to #3.

  • cherk_on cherk_on 11 hours ago Flag

    Here's a fun little tidbit for this Sunday evening. I was watching a youtube video from tweaktown of an interview with representatives from SMART Modular and Netlist talking about NVDIMM. The name of the guy from Netlist is Mario Martinez; interestingly, his full name is Mario Jesus Martinez. Maybe they should send him to cross examine BadAlone of Diablo during the trial! That showdown would be epic!

  • cherk_on cherk_on Jan 13, 2015 6:11 PM Flag

    Craig-Hallum:
    "...since we believe the UlltraDIMM product was an important aspect of SanDisk’s growth plans from flash SSDs in 2015, we believe it will likely drive settlement discussions with Diablo/SanDisk. Since SanDisk is viewed as a highly credible licensing company, we don’t believe they can be seen by customers as hypocritical as it relates to licensing IP. "

    Needham:
    " It is our belief that this could bring SNDK to the negotiating table rather than face the potential of losing at the trial. Consequently, we assume that a $25-50M settlement (at the low-end) could effectively double the market cap of NLST and therefore we upgrade to Buy from Hold..."

    The Wall Street Journal:
    "Injunctions are much rarer than monetary damages in such disputes. But U.S. District Judge Yvonne Gonzales Rogers concluded that an injunction was warranted based on the odds that Netlist will prevail following a trial."

    theregister:
    "Right now El Reg would bet on Netlist being the winner here. Lenovo, Huawei and Supermicro will be urging SanDisk to end the legal action. SanDisk and Tegile will be telling Diablo to get it sorted or they’ll go deal direct with Netlist." ..."Pick up the phone, and call Netlist CEO C K Hong. He will screw a hard deal out of you, but what else can you do?"

  • Given the low downside risk at this point, Netlist is a Strong BUY whether you think it will go to 3, 5, 7, 10, 15, 20, or 40+. The news is spreading and a new wave of investors will continue to come.

  • Reply to

    '912 = the good news keep on coming! Google is next!

    by cherk_on Jan 15, 2015 10:52 AM
    cherk_on cherk_on Jan 15, 2015 11:58 AM Flag

    Let's see how long it takes this news to reach the general public. Long timers here know this is where the latest news comes out first.

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