How Netlist differs from Rambus
UPDATE: added 06/22/2012: Analyst on Inphi IPO potential
Rambus was guilty of taking information FROM JEDEC to inform it’s patenting activity, and thus “front-running” the JEDEC activities.
Netlist, in contrast, was an inventor of a technology that it revealed to a JEDEC member under NDA (Non-Disclosure Agreement), which was alleged to have been leaked by that JEDEC member (see below).
DISCLAIMER: the information presented here is speculative in nature – it is my own interpretation of what the court docs (various cases involving Netlist and Google and Inphi) say about the happenings at JEDEC, and circumstantial evidence relating to the leaking of NDA info from Texas Instruments (based on the allegations against TI and the eventual settlement in Netlist vs. Texas Instruments following which TI has stayed away from the LRDIMM space). Readers are welcome to peruse the court documents and other information to draw their own conclusions. In addition, if readers can contribute more information and references for or against the conclusions drawn in this article, please post them in the comments section below.
With Rambus, the JEDEC was hoodwinked into being dependent on Rambus.
In the case of Netlist, it was the JEDEC which chose to capitalize on their access to leaked information, or if not that at least chose to ignore Netlist claims to that IP. The JEDEC thus became engaged in a long bout of wilful ignorance. In the process supporting a company (Inphi) to openly flout Netlist’s IP claims.
This while the example of MetaRAM and the leaked NDA info from Texas Instruments to JEDEC was known to JEDEC and should have given them pause.
Inphi itself held little IP in load reduction and rank multiplication and that should have been a concern as well.
NLST – manufacturer of memory modules vs. Rambus the IP portfolio company
Netlist has manufacturing facilities which allow it to produce memory modules in large numbers.
Rambus never made it’s own memory that was faster than others were able to make. Rambus’ intention always WAS to act as a patent portfolio company wielding the IP axe at the JEDEC members.
Rambus behavior at JEDEC
Rambus exhibited behavior at the JEDEC which was not forthcoming.
Rambus behavior at the JEDEC was in fact sucking info OUT of the JEDEC to use to build it’s private IP portfolio – in effect blind-siding the JEDEC.
The situation with NLST was quite the opposite, as their IP was alleged to have been leaked INTO the JEDEC by a JEDEC member.
Most likely Texas Instruments – as suggested by the settlement in Netlist vs. Texas Instruments a few years ago, after which Texas Instruments has not entered the LRDIMM space.
Netlist vs. Texas Instruments
From a NLST SEC filing (prior to settlement) – note the reference to “trade secret misappropriation” by Texas Instruments and leakage TO the JEDEC:
NETLIST INC – FORM 10-Q – November 3, 2009
Trade Secret Claim
On November 18, 2008, the Company filed a claim for trade secret misappropriation against Texas Instruments (TI) in Santa Clara County Superior Court, based in TI’s disclosure of confidential Company materials to the JEDEC standard-setting body. On February 20, 2009, TI filed its answer. The parties are currently engaged in settlement discussions. If those discussions are unsuccessful, the Company expects to vigorously pursue its claims against TI.
And a later NLST SEC filing indicating the date of settlement with TI:
Trade Secret Claim
On November 18, 2008, the Company filed a claim for trade secret misappropriation against Texas Instruments (“TI”) in Santa Clara County Superior Court, based on TI’s disclosure of confidential Company materials to the JEDEC standard-setting body. On May 7, 2010, the parties entered into a settlement agreement. The court dismissed the case with prejudice.
Netlist vs. Texas Instruments:
Title: Netlist, Inc. Vs Texas Instruments, Incorporated
Category: Intellectual Property – Unlimited
Filed: 11/18/2008 Disposed: None Status: Open
The behavior of LRDIMM buffer chipset makers
Texas Instruments has not been interested in LRDIMMs – a behavior likely linked to the settlement in Netlist vs. Texas Instruments (related to TI leaking NDA info to JEDEC).
IDTI was quite enthusiastic about LRDIMMs until a few conference calls ago. It has since been steadily deemphasizing LRDIMMs, and has skipped the Intel Romley rollout altogether and postponed it to Ivy Bridge in late 2012.
Inphi is thus the sole-source for buffer chipsets for LRDIMM memory modules for Romley today.
LRDIMM buffer chipset makers
May 24, 2012
NDA info flow from Netlist to JEDEC
In examining Rambus behavior at JEDEC, one can see that Rambus was an offending party – using information gathered at JEDEC meetings to out-maneuver the other JEDEC members (patenting stuff that would likely be where JEDEC would be going).
With Netlist, in contrast, if the allegations are true – that there was a leakage of NDA info from Netlist to JEDEC, then that would be wilful infringement by JEDEC, which would be exacerbated further by JEDEC encouragement of Inphi to openly violate Netlist’s IP.
Inphi holds little IP in load reduction and rank multiplication (the main selling point of LRDIMMs over RDIMMs for high memory loading applications), and has recently suffered a loss in overturning Netlist IP in this area (‘537 and ‘274 patent reexams have re-validated the IP and made it harder for Inphi to rebut when Netlist vs. Inphi resumes – it was stayed pending the reexams).
Intel presentation of memory model based on Texas Instruments leakage
Following the allegation of leak of NDA info, the info from court documents suggests that sometime later, Intel presented a design at JEDEC which looked very much like Netlist IP.
Netlist revealed to JEDEC that they had IP in this area, and that the designs presented was intersecting Netlist IP.
This behavior was very different from the egregious behavior of Rambus at JEDEC.
JEDEC members are required to disclose IP which is being proposed as part of a JEDEC standard.
Wilful ignorance at the JEDEC ?
Given Netlist’s history of wins vs. MetaRAM and Texas Instruments – and the hint of leakage of NDA info that JEDEC members must have known about – it is surprising that JEDEC ignored warnings from Netlist.
And instead chose to endorse Inphi – a company with little IP in load reduction and rank multiplication:
Here we have JEDEC giving an award to Inphi for services rendered:
February 22, 2011 08:00 ET
Inphi’s Chris Haywood Receives JEDEC Leadership Award
What prompted JEDEC to behave this way ?
Inphi did have major investment from some JEDEC members, but that should NOT have justified ignoring of serious IP questions about a future standard (LRDIMMs).
Inphi and MetaRAM link to Rambus
MetaRAM founder Suresh Rajan was from Rambus, and may be back at Rambus now.
Some years after the demise of MetaRAM, we have Inphi hiring former MetaRAM CEO Fred Weber as “Technical Advisor” by Inphi – so it is perhaps not surprising that Inphi seems to be going down a similar road (of aggressive refusal to accept precedence of Netlist IP and then eventual capitulation):
Inphi Taps Industry Visionaries As Technical Advisors
Experts Provide Unique, Global Insight in Technology, Strategy and Direction
WESTLAKE VILLAGE, Calif., February 23, 2010
“I’ve spent my career focused on building balanced computer systems and providing compatible and evolutionary innovations,” said Weber. “Inphi shares my world view that, with the emergence of multi-core and virtualization technologies, the memory system is once again the biggest bottleneck in systems. Inphi recently announced an isolation Memory Buffer component that addresses this dilemma by delivering a new memory scheme that multiplies the server’s memory capacity as much as fourfold. The Inphi team continues to raise the bar and I am happy to be part of their advisory team.”
Inphi new CEO Ford Tamer is former or current partner of Khosla Ventures which was one of VCs for MetaRAM.
For more information:
LRDIMMs similarities with MetaRAM
May 30, 2012
Wilful ignorance at Inphi and IPO underwriting firms ?
Around the time of the Inphi IPO, they were touting the potential of LRDIMMs as one of the selling points for the IPO. This when Inphi holds little IP in load reduction and rank multiplication (which is what distinguishes LRDIMMs from RDIMMs), and was being accused of copying IP from Netlist in Netlist vs. Inphi.
However, what is more interesting is how the analysts who cover both Netlist and Inphi kept quiet about the negatives in Inphi’s position as it readied itself for IPO.
Thus, when Inphi based it’s IPO on the potential of LRDIMMs for Intel Romley rollout, a whole raft of firms were retained to underwrite the IPO.
Inphi IPO raises $81.6 million
11/15/2010 10:09 AM EST
Morgan Stanley & Co. Incorporated, Deutsche Bank Securities Inc. and Jefferies & Company, Inc. are acting as joint book-running managers for the offering. Stifel Nicolaus Weisel and Needham & Company, LLC are acting as co-managers.
Most of the analysts associated with those firms went “quiet” on the questionable right-to-build claims of Inphi – even though some of them must have known as they sat in on both NLST and IPHI conference calls.
UPDATE: added 06/22/2012: Analyst on Inphi IPO potential
For example, as late as Dec 5, 2011, we have Sundeep Bajikar of Jeffries & Co. pointing out LRDIMMs as the Inphi IPO story:
Next Generation Memory Buffers For High Performance Computing May Double Penetration In The Near Term; Memory Buffers Can Increase Virtualization Efficiency
December 5, 2011
TWST: Which of the companies in your coverage are your top picks right now and why?
Mr. Bajikar: Within the small/medium-cap space, my top idea is Inphi, their ticker is IPHI. They went public last year. They have a couple of different areas of business, and 70% of the revenues come from the server market. They provide memory buffers that allow you to back more memory inside a standard server than you would otherwise be able to do. That is good for people that are building data centers or even the next-generation cloud infrastructure because it improves efficiency of virtualization just by packing in more memory. And it’s relatively low cost because you are paying the cost of the memory buffer rather than upgrading your entire microprocessor or even the server. So that’s 70% of Inphi’s revenues. The other 30% of Inphi’s revenues come from high-speed communications, primarily optical components that are used to plug fiber optic cable into routers and switches for long-distance high-speed transmission, whether it’s 10 gigabits per second or 40 gigabits per second, and an increasingly 100 gigabits per second.
The initial story at IPO was they would have a large product cycle on Intel’s next-generation servers, which are predicted to come to market in Q1. Intel is shipping their chips in the market this quarter, and then the server OEMs are expected to bring servers to market next quarter in Q1 of 2012. These servers will feature Inphi’s next-generation memory buffer, which effectively increases the content for Inphi and it basically quadruples the amount of memory that you can pack in the server. So it’s very exciting technology. It’s a portion of the server market that’s referred to as HPC, high-performance compute. It’s only about 10% of the market, so it’s sort of a niche market. But as we did more work on this, what we figured out is that the application for this next-generation memory buffer is actually much broader because it can go into the core of the cloud. It can increase your virtualization efficiency and therefore have much broader relevance than just the initial 10%. So we have a view that penetration could be anywhere from 20% or more into the server market, which effectively translates to a large upside for Inphi if that actually happens. That’s a big part of the near-term story for Inphi.
It is possible that one of the incentives for Inphi to put on a brave face may have been to enable an IPO to go through at a difficult time in the markets.
IPO Watch: Inphi Takes the Public Plunge
By James Rogers 06/17/10 – 10:24 AM EDT
The IPO market, however, remains tough, thanks to the ongoing impact of Europe’s debt woes. Bloomberg reports that at least 34 companies worldwide have postponed or withdrawn their IPOs since the start of last month.
Inphi co-founder CTO Gopal Raghavan left the company earlier:
Inphi Announces Management Changes and Key Executive Promotions
SANTA CLARA, Calif., February 17, 2011
In addition, Inphi also announced that after spending 10 years with the Company, Dr. Gopal Raghavan, co-founder and current CTO, has resigned.
And more recently the CEO Young Sohn has retired:
Inphi Appoints Ford Tamer Chief Executive Officer
Former CEO Young Sohn Retires
MarketwirePress Release: Inphi Corporation – 6 hours ago
“Young has played a significant role in the creation and successful development of Inphi over the past five years, resulting in its successful initial public offering in November 2010 and the company’s strong competitive market position today,” said Dado Banatao, Chairman of Inphi. “We thank him for his leadership and years of service to Inphi and wish him well in his retirement.”
Both the co-founder CTO and the former CEO may have profited from the successful IPO, but will not be around to answer questions if Inphi faces difficulty in the future.
Inphi seems to claim in this filing that there was no litigation against it at the time of the IPO – something which is contradicted by Inphi’s later SEC filings (risk factors).
Did Inphi deliberately omit litigation issues from it’s SEC filings which would have made beautification of the IPO difficult for analysts ?
If this is an incorrect filing, please use the comments section below to correct:
INPHI Corp – FORM S-1/A – EX-2.1 – SHARE PURCHASE AGREEMENT – July 21, 2010
4.15 Absence of Litigation.
(a) To the commercially reasonable knowledge of the Company, neither the Company nor is any Subsidiary in material violation of applicable competition law, nor is or has the Company or any Subsidiary subject to any examination by any competition authority.
(b) No litigation, arbitration, administrative or criminal proceedings by or against the Company or any Subsidiary is or are pending or, to the commercially reasonable knowledge of the Company, is or are threatened against the Company or any Subsidiary. To the commercially reasonable knowledge of the Company or any Subsidiary, there are no facts or circumstances which will give rise to any litigation, arbitration, administrative or criminal proceedings against the Company or any Subsidiary.
(c) Neither the Company nor any Subsidiary is not subject to any judgment, injunction or other judicial or arbitral decision or award which in any material respect restricts the Company’s or any Subsidiary’s present or future business.
Changing language in Inphi’s SEC filing about infringement
An earlier IPHI SEC filing has some risk factors and info on the lawsuits and the impact it may have on IPHI’s memory module (buffer chipsets) business:
INPHI Corp · 424B4 · On 4/1/11
For example, Netlist, Inc. filed suit against us in the United States District Court, Central District of California, in September 2009, alleging that our iMB ™ and certain other memory module components infringe three of Netlist’s patents. For more details, see “Business—Legal Proceedings.”
Infringement claims also could harm our relationships with our customers or distributors and might deter future customers from doing business with us. We do not know whether we will prevail in these proceedings given the complex technical issues and inherent uncertainties in intellectual property litigation. If any pending or future proceedings result in an adverse outcome, we could be required to:
* cease the manufacture, use or sale of the infringing products, processes or technology;
* pay substantial damages for infringement;
* expend significant resources to develop non-infringing products, processes or technology, which may not be successful;
* license technology from the third-party claiming infringement, which license may not be available on commercially reasonable terms, or at all;
* cross-license our technology to a competitor to resolve an infringement claim, which could weaken our ability to compete with that competitor; or pay substantial damages to our customers or end users to discontinue their use of or to replace infringing technology sold to them with non-infringing technology, if available.
Any of the foregoing results could have a material adverse effect on our business, financial condition and results of operations.
Following the Inphi loss at the USPTO with Netlist ‘537 and ‘274 patents surviving reexamination with ALL claims intact, one would think these risk factors would still apply.
Yet, they have paradoxically vanished from the most recent Inphi SEC filings:
INPHI Corp · 10-Q · For 3/31/12
Filed On 5/9/12 2:32pm ET · SEC File 1-34942 · Accession Number 1193125-12-221626
Evidently Inphi now thinks it no longer needs to warn shareholders about the risks of infringement.
Rambus behavior at the JEDEC was a sucking out of info from the JEDEC to use to build it’s own private IP portfolio – in effect blind-siding the JEDEC.
Netlist in contrast informed JEDEC that the stuff JEDEC was starting to discuss was already in Netlist’s IP portfolio (i.e. NLST abided by the rules – unlike Rambus which let them talk and built up IP based on where JEDEC was going).
In addition, NLST was the holder of IP which was leaked to the JEDEC (possibly by Texas Instruments) and then possibly later used by JEDEC to formulate LRDIMMs.
So the two cases are diametrically opposite in nature – in one the JEDEC was taken for a ride by Rambus, and in the other it was Netlist which was offended by JEDEC behavior.
JEDEC is now taking DDR4 standard in a direction that goes beyond LRDIMMs copying of Netlist IP – DDR4 seems to copy Netlist HyperCloud’s symmetric lines and distributed buffer chipset even more closely.
For an examination of the risks associated with ignoring licensing for a JEDEC standard:
JEDEC fiddles with DDR4 while LRDIMM burns
June 7, 2012