Let's focus on the question that How can Red John know Jane's happy memory? It can be explained in several ways. Jane's most vulnerable moment lying in hospital Red John got close to him to reach information or Red John is someone very close to him/ know someone very close to him. This option also brings to our mind his father. Last time we saw him when Jane escaped from the circus. Hereby, he lost Jane with a generous income and this left him in a difficult situation. Also we do not know much information about his father. In other words, they do not have good father-son relationship, I mean his father as valuable as gold mine for Red John.