Orange County Business Journal

Patent Office Rejects Infringement Claims Against Netlist, Shares Surge

Chris Casacchia Monday, December 10, 2012

Netlist Inc. shares surged Monday after the Irvine-based company announced the U.S. Patent and Trademark Office rejected claims brought by a competitor that it had infringed on patents.

The stock rose more than 32% in early afternoon trading to a market value of $32.5 million after the ruling was disclosed

The ruling could affect a lawsuit that was filed in U.S. District Court for the Eastern District of California by the competitor—Newark, Calif.-based Smart Modular Technologies Inc.

Its dispute with Netlist involves patents related to Netlist’s recently introduced HyperCloud products.

The products are designed to handle large memory capacity and are billed to improve performance by 25% compared to the industry standard. Netlist makes a range of memory boards with specialized controller chips to manage server memory.

The HyperCloud products have been likened to expanding a highway from two to four lanes, allowing data to flow back and forth quickly. The HyperCloud product has been adopted in servers from New York-based IBM Corp., which helped Netlist during years of development.

Netlist is among several Orange County-based technology companies slated to benefit from a new line of chips debuted by Santa Clara-based Intel Corp.

The world’s largest chipmaker is targeting data centers with cloud services, memory-product makers and others with a new line dubbed the Romley platform that’s touted to boost performance while lowering operating costs.