A federal district court judge ordered a preliminary injunction against a Canadian company from manufacturing, using, distributing or selling high-speed memory controller chips used by SanDisk and other major computer manufacturers.
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Netlist announced that Judge Yvonne Gonzalez Rogers of the United States District Court for the Northern District of California granted Netlist's Motion for Preliminary Injunction against Diablo Technologies for controller chips used by SanDisk in its high-speed ULLtraDIMM SSD product line.
Under the Court's order, Diablo and SanDisk are prohibited from manufacturing and selling the controller chipset used by SanDisk in the ULLtraDIMM and as a result, from further sale or distribution of the ULLtraDIMM itself.
Judge Gonzalez Rogers found that "the evidence indicates that Netlist is likely to prevail by showing that the Netlist Technology was used by Diablo to develop" its controller chips. "By misusing the technology that Diablo had been given in confidence under the Supply Agreement [with Netlist], Diablo gained an advantage it would not have otherwise had."
In the Court's Order, Judge Gonzalez Rogers rejected Diablo's arguments that it somehow had rights to use Netlist's chipset and technology under the agreements.
The judge also rejected SanDisk's motion for reconsideration, asking that it be allowed to sell existing inventory of the enjoined products.
The Court found that the injunction properly barred SanDisk from selling these products after a careful review of the long contractual partnership between Diablo and SanDisk with respect to the ULLtraDIMM module, finding that SanDisk and Smart Storage "are 'persons who are in active concert with' Diablo."
The Court advanced the trial date by four months, to March 9, 2015, for Netlist's claims upon which the motion was decided, including claims against Diablo for trade secret misappropriation, breach of contract, and other causes of action related to the components supplied by Diablo for the ULLtraDIMM.
The Court's order specifically identifies the ULLtraDIMM as well as the eXFlash modules from IBM, although the injunction affects all modules containing Diablo components. Other OEMs, including Huawei, Lenovo and Supermicro, have announhe four Netlist patents with claims that the PTAB refused to review. ■