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SK Hynix Wins Agency Review of Netlist Patent Before Texas Trial

March 17, 2021, 8:26 PM

SK hynix Inc. convinced a U.S. Patent and Trademark Office tribunal to review a Netlist Inc. memory module patent, even with a Texas infringement trial less than four months away.

Getting Patent Trial and Appeal Board review of a patent when a district court trial date is approaching has been more difficult for accused infringers since the patent office introduced its NHK-Fintiv rule. The rule allows the board to decline a patent challenge based on the progress of a parallel infringement case.

The PTAB agreed to institute inter partes review of Netlist’s U.S. Patent No. 10,217,523. The board said SK hynix had shown at least one claim in the patent is likely invalid.

A parallel infringement suit in the U.S. District Court for the Western District of Texas is set for trial July 6—about eight months before the PTAB will issue a final decision. The board noted the trial, but credited SK hynix’s diligence in bringing the challenge and its efforts to minimize overlap between the proceedings.

“The Fintiv factors weigh on both sides, however, much work remains to be completed in the parallel proceeding, petitioner was diligent in filing its petition, and petitioner, by its broad stipulation, mitigated concerns about duplication of effort and potential for inconsistent results,” the board wrote in a decision Tuesday.

Obviates Overlap

Netlist sued SK hynix in West Texas in March 2020, accusing the company of infringing memory module patents. It filed a second complaint in June, asserting the ‘523 patent. SK hynix challenged the patent at the PTAB three months later.

SK hynix has said that if review was instituted, it would not raise in district court any arguments that could have been raised at the PTAB.

“We agree that the stipulation, thus, obviates much, if not all, of any potential overlap between the issues in this proceeding and the district court proceeding,” the board wrote.

The PTAB’s decision opens another front in a sprawling legal fight between SK hynix and Netlist.

Earlier this year, the U.S. Court of Appeals for the Federal Circuit ordered the Texas litigation paused until U.S. District Judge Alan Albright ruled on SK hynix’s request that the suits be sent to California. The request had been sitting on the judge’s docket for several months.

Albright denied SK hynix’s transfer motion the day after the Federal Circuit’s ruling.

SK hynix is represented by Sidley Austin LLP. Netlist is represented by Mintz Levin Cohn Ferris Glovsky and Popeo PC.

The case is SK hynix Inc. and SK hynix America Inc., P.T.A.B., No. IPR2020-01421, 3/16/21.

To contact the reporter on this story: Matthew Bultman in New York at mbultman@correspondent.bloomberglaw.com

To contact the editor responsible for this story: Keith Perine at kperine@bloomberglaw.com