Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_13-cv-05962/USCOURTS-cand-4_13-cv-05962-24/pdf.json

Nature of Suit Code: 410
Nature of Suit: Antitrust
Cause of Action: 28:1331 Fed. Question: Anti-trust

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United States District Court 

Northern District of California 

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

NETLIST, INC.,

Plaintiff, 

 vs. 

DIABLO TECHNOLOGIES, INC., 

Defendant. 

Case No.: 13-cv-5962 YGR 

ORDER DISSOLVING PRELIMINARY 

INJUNCTION 

On January 6, 2015, the Court issued an order under seal indicating that it would grant in part 

the motion of Plaintiff Netlist Inc. (“Netlist”) for a preliminary injunction, and directing the parties to 

address the amount of the bond and whether any part of the order should remain under seal. (Dkt. 

No. 251). At that same time, the Court issued an order advancing the trial date in this action in light 

of the potential for prejudice to Defendant Diablo Technologies, Inc. (“Diablo”) on account of the 

preliminary injunction. (Dkt. No. 252.) On January 12, 2015, the Court issued its Amended Order 

Granting In Part Motion for Preliminary Injunction, which enjoined Diablo “from manufacturing, 

using, distributing and/or selling the Rush and Bolt integrated circuits manufactured by or obtained 

from Diablo, including any such Rush and Bolt integrated circuits contained in or provided along 

with the ULLtraDIMM module, the IBM eXFlash module, or any other product.” (Dkt. No. 277, 

“Preliminary Injunction Order,” at 20.) 

The case thereafter proceeded to a jury trial. Jury selection was held on March 2, 2015, and 

jury trial commenced on March 9, 2015. On March 25, 2015, the jury returned its verdict in favor of 

Diablo on the claims of Netlist for breach of contract, trade secret misappropriation, and correction 

of inventorship, and in favor of Netlist on its claims of trademark infringement and Lanham Act false 

advertising. (Dkt. No. 420.) Now before the Court is Diablo’s Motion to Dissolve the Preliminary 

Injunction. (Dkt. No. 440.) 

Case 4:13-cv-05962-YGR Document 457 Filed 04/24/15 Page 1 of 3
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United States District Court 

Northern District of California 

The Court, having considered the papers and pleadings in this matter, the evidentiary record, 

and the arguments of the parties, ORDERS that the Motion is GRANTED and the Preliminary 

Injunction Order issued January 12, 2015 is DISSOLVED. 

To establish a right to a preliminary injunction, a plaintiff must demonstrate that: (1) it is 

likely to succeed on the merits; (2) it is likely to suffer irreparable harm absent preliminary relief; (3) 

the balance of equities tips in its favor; and (4) the injunction is in the public interest. Winter v. Nat. 

Res. Def. Council, Inc., 555 U.S. 7, 20 (2008); American Trucking Associations, Inc. v. City of Los 

Angeles, 559 F.3d 1046, 1054 (9th Cir. 2009). Thus, preliminary injunctive relief is appropriate only 

where the moving party demonstrates that there is a likelihood of success on the merits of its claims. 

Winter, 555 U.S. at 21. 

“[S]ound judicial discretion may call for modification of the terms of an injunction decree if 

the circumstances, whether of law or fact, obtained at the time of its issuance have changed, or new 

ones have arisen.” Mariscal-Sandoval v. Ashcroft, 370 F.3d 851, 859 (9th Cir. 2004) (quoting Sys. 

Fed’n No. 9 Railway Employees’ Dept. v. Wright, 364 U.S. 642, 647–48 (1961)). “Because 

injunctive relief is drafted in light of what the court believes will be the future course of events... a 

court must never ignore significant changes in the... circumstances underlying an injunction lest the 

decree be turned into an instrument of wrong.” Salazar v. Buono, 559 U.S. 700, 714-15 (2010) 

(internal quotation marks omitted). “A party seeking modification or dissolution of an injunction 

bears the burden of establishing that a significant change in facts or law warrants revision or 

dissolution of the injunction.” Sharp v. Weston, 233 F.3d 1166, 1170 (9th Cir. 2000). 

 The jury’s verdict was in favor of Diablo on the breach of contract claims that formed the 

basis for the Court’s grant of a preliminary injunction, as well as its verdict in favor of Diablo on the 

trade secret misappropriation claims as to which Netlist also sought injunctive relief. The verdict 

represents a significant change in the likelihood of Netlist’s success on the merits of its claims, based 

upon the full trial record. With the likelihood of success so undermined, the foundation for a 

preliminary injunction no longer exists. 

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United States District Court 

Northern District of California 

 Netlist contends that the Court should deny the motion to dissolve or delay ruling on it until it 

has decided Netlist’s yet-to-be-filed post-trial motions. The Court does not find this to be a 

persuasive reason to maintain the preliminary injunction. A preliminary injunction must be based 

upon the record before the Court at this time. The possibility that, at some point in the future, the 

Court might grant a motion by Netlist that would reverse the jury’s verdict is insufficient to 

overcome the current state of the case: that Netlist failed to persuade a jury that Diablo breached any 

agreement or misappropriated any trade secrets. The balance of the equities, in light of that verdict, 

tips sharply in favor of Diablo being allowed to resume sales of its products. And the public interest 

does not favor enjoining sales of a product as to which the jury found no illegal advantage. 

 Finally, as the district court noted under similar circumstances in Apple v. Samsung, No. 11-

cv-1846, 2012 WL 4490558, at *2 (N.D. Cal. Oct. 1, 2012), should Netlist prevail on any post-trial 

motion, a permanent injunction would be prospective from that point, not retroactive. The Court’s 

determination that Netlist can no longer show a likelihood of success on the present record does not 

prejudge the possibility of Netlist prevailing on any post-trial motion it might file. The Court’s order 

herein simply acknowledges the state of the case at this time.1

 

 For the foregoing reasons, Diablo’s Motion to Dissolve the Preliminary Injunction is 

GRANTED and the January 12, 2015 Preliminary Injunction Order is DISSOLVED. 

IT IS SO ORDERED. 

Dated: April 24, 2015 

______________________________________ 

 HON. YVONNE GONZALEZ ROGERS

 UNITED STATES DISTRICT JUDGE

 

1 It is worth noting that the Federal Circuit’s orders granting a limited remand to this Court 

for purposes of a decision on the motion to dissolve the preliminary injunction, pending Diablo’s 

appeal of the preliminary injunction order, stayed the effect of the preliminary injunction. (See Dkt. 

Nos. 434, 441.) 

Case 4:13-cv-05962-YGR Document 457 Filed 04/24/15 Page 3 of 3