CAFC Affirms PTAB Rulings Upholding Netlist Patent

The U.S. Court of Appeals for the Federal Circuit (CAFC) on February 20 affirmed two final written decisions from the Patent Trial and Appeal Board (PTAB) in inter partes review (IPR) proceedings upholding claims of Netlist, Inc.’s patent.

Micron Technology, Inc. challenged claims of U.S. Patent No. 10,489,314, owned by Netlist, via two IPRs. The ‘314 patent is directed to a “memory module” that allows a computer to access and retrieve information for processing tasks. The patent describes a memory module with two rows of memory devices, or “ranks,” that communicate with a logic circuit. Two key aspects of the patented technology are that these ranks operate non-concurrently, meaning only one is activated at a time. Additionally, the data communication speed between the external memory controller and the memory module is the same as the internal communication speed between the module’s logic circuit and its ranks.

Micron alleged claims of the ‘314 patent were obvious over a prior art patent application known as Halbert. In the first proceeding, IPR2022-00744, the PTAB determined that Micron failed to show that Halbert would have rendered claim one’s “specified data rate” limitations obvious. The PTAB construed the term to mean that the data rate between the memory module and the memory controller was the same as the rate between the module’s logic and its ranks. The PTAB found that Halbert disclosed ranks operating at half the rate of the memory module, and therefore did not teach the claimed limitations.

In the second proceeding, IPR2022-00745, Micron argued that other claims were obvious based on a combination of two different embodiments, Figure 2 and Figure 4, from the Halbert reference. The PTAB determined that Micron failed to show a person of ordinary skill in the art would have been motivated to combine the chip select signals from Halbert’s Figure 2 with the memory module in Halbert’s Figure 4. The PTAB noted that incorporating the non-concurrent operation from Figure 2 into the concurrently operated module of Figure 4 would negatively impact performance. Micron had not explained why a skilled artisan would have made such a combination, “accounting for the performance impact of not operating [the] ranks . . . concurrently.”

On appeal, Micron presented three main arguments, all of which the Federal Circuit rejected. Micron argued that the PTAB misconstrued the term “data rate,” asserting its plain and ordinary meaning is simply a ratio. The Federal Circuit disagreed, finding that in the context of the claim, a “data rate” refers to a rate at which data is transmitted between specific components. The court said Micron’s broader interpretation could not “be squared with claim 1’s plain language.” The court reasoned that the claim requires a data rate between components, not a ratio of rates across different pairs of devices.

Furthermore, Micron argued that the PTAB’s motivation-to-combine analysis was legally flawed. Micron contended the PTAB wrongly required it to show a motivation to combine for a single claim limitation in isolation, rather than for the claim as a whole. The Federal Circuit found this argument “rests on a mischaracterization of the Board’s decision.” The court explained that the PTAB did not look at the limitation in isolation but properly considered the requirements in the context of “the subject matter as a whole,” consistent with precedent.

Micron also argued that it was legal error for the PTAB to require a motivation to combine the figures to operate concurrently when Halbert also suggested non-concurrent operation. The Federal Circuit was not persuaded. The court noted that the PTAB found fundamental differences between the two figures in Halbert, specifically that combining them would eliminate the goal of increased memory throughput in Figure 4. The court stated that there was no legal error because the obviousness inquiry requires considering whether a skilled artisan “would have been motivated” to combine references, which involves assessing fundamental differences between them.

Micron argued that the PTAB erred in construing a limitation regarding to where “non-active” chip select signals are sent. The Federal Circuit found it unnecessary to resolve this specific construction dispute and noted that Micron’s argument failed regardless, because it was undisputed that the prior art reference sent the necessary active chip select signals to a different component, a multiplexer, than what the claim required. The claim required the ranks to receive the signals, and Micron did not dispute this finding on appeal. Therefore, its alternative motivation to combine arguments failed. The court considered Micron’s remaining arguments and found them unpersuasive, affirming the PTAB’s decisions and awarding costs to Netlist.

In a statement following the decision, Netlist said the affirmance marked the third time in the last year that the CAFC has upheld the validity of its patents asserted against Micron or Samsung. “These affirmances of the validity of Netlist’s patented technologies attest to Netlist’s role as an innovation leader in the semiconductor memory industry,” said C.K. Hong, Netlist’s Chief Executive Officer.

The statement also noted that Netflix is asserting the patent at issue here against Micron in district court as well, in a case that is currently stayed.