Injunction Imposed on Chip Memory

Netlist Inc won a preliminary injunction Monday that blocks the sale of chips used in data storage in products by IBM Corp. SanDisk Corp and others.

U.S. District Judge Yvonne Gonzalez Rogers ruled that Netlist had shown a likelihood of success on the merits of claims that Diablo Technologies Inc. breached contracts between the two firms and stole trade secrets.

Netlist accused Diablo Technologies of purloining work the two did together on memory technology.

Rogers originally issued her order on January 6 under seal but made the ruling public Monday in an amended decision.

The order blocks the manufacture, use, sale and distribution of the Diablo Rush and Bolt chips and any ULLtraDIMM model containing the chips.

But Rogers stopped short of issuing a mandatory recall of previously shipped modules saying Netlist “has not met the higher burden associated with a mandatory injunction.”

She set an early trial date of March 9, 2015 to minimize the impact on both sides.

Beginning in 2003, Netlist began research and development of computer server memory technology to increase member capacity and system performance through dual in-line memory modules known as DIMM.  The firm developed its HyperCloud memory modules and chipsets and began negotiations with Diablo to produce the modules.

In 2008, after Netlist supplied details of the confidential technology based on the supply agreement.  Netlist alleges that Diablo then missed multiple production deadlines and in 2010 Diablo told investors that it planned its own TeraDIMM memory module.  Netlist sued claiming the product was based on the Netlist product using its trade secrets.

The March trial will determine if the injunction should be made permanent.

Case: Netlist Inc v. Diablo Technologies Inc, No. 13-5962YGR




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