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Compliance with industry standards can be used to show patent infringement

September 27, 2010
Post by Blog Staff

In Fujitsu et al v. Netgear, the Federal Circuit held compliance with an industry standard can be sufficient evidence to establish patent infringement. However, this rule only applies when the only way to adhere to the industry standard is to infringe the asserted patent, such that any product that complies with the standard infringes. In this case, the court determined that a party could comply with the standards at issue without infringing the patents; therefore, direct comparison of the products with the claims was necessary.

More detail after the jump.

Netgear Inc. makes wireless routers that are accused of infringing a patent licensed to U.S. Philips Corporation. Wireless routers are used for sending data between a mobile device (such as a laptop) and a computer network (such as the Internet). Products in this industry typically comply with industry-wide agreed-upon standards to ensure compatibility. In this case the standards relate to the protocols for fragmenting and defragmenting messages sent between the devices. Philips asserted that in order to comply with these standards, it was necessary for Netgear to infringe the asserted patent. Netgear countered that a comparison of the accused product with the claim language is necessary in all cases to show infringement, and that merely showing compliance with a standard is not sufficient to show infringement.

The Federal Circuit held that in cases where the claim language has been construed to cover all implementations of a standard, a showing that the accused product complies with the standard is sufficient to establish infringement. The court reasoned that "if an accused product operates in accordance with a standard, then comparing the claims to that standard is the same as comparing the claims to the accused product." This can simplify the infringement issue in many instances because the accused infringer will generally have admitted that the products comply with the applicable standards. The court recognized "in many instances, an industry standard does not provide the level of specificity required to establish that practicing that standard would always result in infringement. . . . In these instances it is not sufficient for the patent owner to establish infringement by arguing that the product admittedly practices the standard."

In this case, the court determined the specific provisions at issue within standards were optional. Specifically, the standards described how to fragment data, but did not require fragmenting data. Therefore, a party could comply with the standards without fragmenting data in an infringing manner, and a direct comparison of the claims with the routers was necessary.

The court also addressed several other issues. Because the claims at issue are method claims, Netgear could not directly infringe the claims by making and selling the devices. Instead, Philips asserted that Netgear was liable for contributory infringement under 35 U.S.C. § 271(c).

One of the elements necessary to establish contributory infringement is that the product at issue is not "suitable for substantial noninfringing use." The fragmenting feature at issue was defaulted to an off mode in the routers, and had to be activated by a consumer before it would work. Netgear presented evidence the routers would work in a non-infringing mode and urged that the routers were therefore suitable for substantial noninfringing use. Philips argued that it was not the routers as a whole that should be considered, but rather the fragmenting software and hardware within the routers that should be considered. The court agreed with Philips that the fragmenting software and hardware was a separate and distinct tool of a larger product that must be analyzed apart from the router as whole for substantial noninfringing use. Because the fragmenting hardware and software had no substantial noninfringing use, this element of the contributory infringement analysis was satisfied by the routers.

Contributory infringement also requires a showing the contributory infringer "knew that the combination for which its components were especially made was both patented and infringing." The court found that a letter sent to Netgear that identified the patent and asserted that all products that comply with the industry standard infringe the patent was sufficient to create an issue of fact as to whether Netgear had the requisite knowledge. However, the court refused to adopt the standard requested by Philips that would have only required a showing of knowledge of the patent and knowledge of the relevant acts, without knowledge that the acts constituted infringement. Accordingly, the court remanded the case for resolution of this issue.

The court also reviewed claim construction issues related to additional patents owned by Fujitsu Limited and LG Electronics, Inc. that were asserted against Netgear, and affirmed the district court on these issues.

To read the full decision in Fujistu Ltd. v. Netgear Inc., click here.


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