Release Date: April 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Hi, Chuck. Hi, Gail. I'm just trying to understand from the relationship of the Samsung finding in East Texas to Russia for that to the breach of contract case in California. Chuck, can you just tell me if those two are linked or if they're kind of separate impacts?
A: They're obviously related because it's those patents that are being that have been found invalid in the PTAB proceedings. Now the PTAB proceedings are obviously not final within the PTAB, then decision and the PTAB is final and that has been appealed to the Federal Circuit. The two other families, one involving the PMACDDR. five and the HBM and the two patents each there, the four patents altogether, they will still be going through a further processes within the PTAB neither a director review or a a rehearing. And once we go through that then as we can then appeal that those to the Federal Circuit, the federal US Federal Circuit appeal decision, it is for all practical purposes is the final decision on those patents, but and the system is set up so that the District Court through each trial, a jury trial. This is a reaches its own decision on both infringement and validity. So you have actually two competing decisions that will get to the appellate court for a final final. So I don't know if that is helpful, but that's how the process works.
Q: No, it definitely helps. And maybe a follow-up question there. Chuck, just to understand, I mean, as an example, the nine 12 patent having gone through 14 years of sort of reviews is a decision either direction, final or kind of situation where it can go back and forth on that note as indefinitely, which is?
A: Yes, just to clarify what we just spoke of is the $300 million a jury verdict. First of all, that remains in place. These decisions at the PTAB, our PTAB is a government agency under the USPTO, which is under the Department of Commerce and the executive branch. So it's a decision that the courts look at, but the courts render their own decision under the judicial branch and they have their decision on the $303 million infringement verdict that remains in place now so that we do we've got a court decision of a infringement and validity duty and a damages award for $300 million. That remains intact while a government agency has found the patents to be unpacked printable. So you've got two conflicting decisions that needs that need to get resolved at the Federal Circuit Court of Appeals. That's where all of this kind of gets reconciled. The nine 12 patent is separate from it and a separate case arm along with a couple of other LRDIMM patents. And that is what we call the Eastern District of Texas case two against both Micron and Samsung and one of those cases, the one against Micron is set to go to trial on the 20th of May. But and your question about whether the nine 12 from what we will do with that? Yes, it's there is no other patent. I don't think in history that have gone through what this has gone through. It has been found valid by the USPTO and Pete had four separate times from and what this recent panel has done. First of all and instituting this patent is kind of extraordinary that they instituted something that their predecessors has has said that it's been valid. They should have not instituted it, particularly because it was broad. It was challenged by Samsung. And they clearly blatantly said that they're doing this on behalf of Google. So it should not have been instituted. So there's something wrong that's going on there. Clearly at the peak tab. And yes, we need to enlist you know some higher powers in the government. And in the past, we have had a poll like people like Paul Michelle, who used to be the the the chief judge at the Federal Circuit, right? And our bad criticizing and the decision to even institute this patent again at the at the time of institutions. So we are looking at different options because this is what's happening here. It's not double jeopardy, it's quadruple quintuple. I mean, it's a once you've been given a clear, clear title to an asset in this country. Should that should be your title. They are now questioning your title four different times or the fifth different time. And on the fifth time they're saying now, okay, all of the four proprietor examinations and the Federal Circuit finding is as wrong. We're finding some different angle to see that this was should have never been patentable. So it's yes, it is quite the, yes, P&L it's hard to even put in to a single award, what's happened here.
Q: What's happened here now appreciate the insight on the challenges you have there. And I think you made it relatively clear. What's going on. I'm switching over to the product side, the on the memory market improving, I guess, pricing firming. Can you just talk about the puts and takes in that? I guess the demand would drive the pricing up, but maybe supply hasn't been expanded and how that affects your opportunity for resale and new product opportunity in that three quarters?
A: Yes, Suji, on the the market has certainly become better on a it's not a it's not any kind of a significant shortage as of yet. But on just in general compared to last year, things are improving. And you see that from results from our big suppliers like Hynix recently in Micron. So I think about D-Ram and will continue to the price will appreciate and the demand is in those remaining relatively strong, and that will continue out through the rest of this year. We're seeing some we're seeing good demand from our customers as well so we believe that things will improve our results. Certainly, the top line will continue to incrementally improved for the second half of this year. The bottom line obviously are going to depend on. We're still we're still spending quite a bit on the legal front with the two trials coming up in May. And then we continue to invest significantly in the CXL development, which is really, you know, it is going to be the market for the second half of this decade. So and we were As said, we manage the investments as closely as possible and tightly as possible. And but these are investments that we need to make as a business, given that we must monetize the assets that we have here.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
