A court case that concluded on Friday proved a disaster for electronic manufacturer Neonode (NASDAQ:NEON). Neonode was suing Samsung (OTHEROTC:SSMMF) over a matter of patent infringement. But a judge found that the infringement in question didn’t actually happen, and put a lot of Neonode’s overall case in jeopardy.
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The word out of a Markman hearing oversaw by U.S. District Judge Alan Albright noted that there was one asserted claim connected to the ‘879 patent. Worse, that asserted claim was “indefinite,” which means it was also invalid. This claim was enough for MDC Financial Research LLC’s director of research, Michael D. Cohen, to declare the case’s current status “pretty bad.” Specifically, Cohen noted that when what they believed to be Neonode’s “most important patent” was invalidated, that left the whole case without much room to work. Indeed, the ‘993 patent—the other one involved in the case—had already been rendered invalid from a trial back in June 2022.
That’s certainly bad news. However, things may not be quite so dire as previously believed. Reports note that Neonode has a cash runway of roughly three years and four months from March. That suggests three years worth of operation from July 2023, giving it plenty of time to build up its cash flow. And with further reports noting that Neonode is actively reducing its cash burn rate, that should only improve things from there.
Today was certainly a blow to Neonode, and a look at the last five days in trading doesn’t suggest anything better. Neonode already took one hit in the early afternoon on July 7, which kicked off a slow slide into Monday morning. That’s when the word about the court case hit like a bus, and cost Neonode about a third of its market cap in one swoop.
