TradingKey - On September 29, Eastern Time, memory technology company Netlist announced that it has filed a new complaint with the U.S. International Trade Commission (ITC), alleging that Micron Technology (MU) and downstream products using related technologies infringe two High Bandwidth Memory (HBM) patents.

The company requested that the ITC restrict imports of the products in question and order a halt to related sales and other activities. Nvidia (NVDA), Google (GOOGL), and Broadcom (AVGO) were also named as respondents.

Which Micron Products Are Involved in Netlist's Embargo Application?

Netlist stated that its U.S. Patent Nos. 12,308,087 and 12,646,537 cover at least Micron's HBM3E, HBM4, and HBM4E products, and alleged that the relevant products infringe on these patents. Reuters reported that the complaint was first filed confidentially on September 25.

Netlist requested restrictions on importing allegedly infringing Micron DRAM devices, as well as products such as GPUs and servers using these memory chips, into the United States, and demanded a halt to related sales activities. The infringement allegations and requests for import restrictions remain under review.

At the time of Reuters' report, Micron declined to comment, while Nvidia, Google, and Broadcom had not yet responded to requests for comment.

ITC Previously Instituted DDR5 Case

Netlist filed another ITC complaint on August 11, alleging that Micron's related DDR5 server memory modules infringed four patents involving RDIMM and MRDIMM products. Super Micro Computer, HPE, and Lenovo were also named as respondents.

The ITC launched an investigation on September 23 under Investigation No. 337-TA-1523, making no determination on infringement upon institution. This new HBM filing involves different products and patents, naming Nvidia, Google, and Broadcom as respondents.

In the DDR5 case, an Administrative Law Judge will hold an evidentiary hearing and make an initial determination on whether Section 337 has been violated, which the Commission may review. The ITC will set a target date for completing the investigation within 45 days after institution.

The two parties previously engaged in patent infringement litigation in U.S. federal court as well. In 2024, Netlist won a $445 million patent infringement jury verdict against Micron in a Texas federal court.

How Will the Embargo Application Affect Micron's Business and MU Stock Price?

Subsequent developments regarding the new petition depend on whether the ITC institutes an investigation, the infringement determination, and the scope of import restrictions. If the restrictions cover the accused HBM and related AI hardware, Micron and downstream manufacturers may need to obtain patent licenses, adjust designs, or switch memory supply options, measures that could increase costs or impact U.S. deliveries.

From an investor perspective, developments in the case may increase short-term volatility in MU's stock price. If an adverse ruling affects HBM sales or drives up costs, the market may lower Micron's earnings expectations; if a licensing agreement or settlement is reached, the associated uncertainty may diminish, with the specific impact depending on the fees and the scope of the agreement.

Going forward, attention should be paid to changes in customer orders, delivery schedules, HBM revenue, and company profit margins. Revenue from the affected products, potential licensing fees, and product adjustment costs serve as important bases for evaluating the financial impact of this patent dispute.

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