The Federal Circuit recently affirmed that an admission thatan accused infringing device practicing an industry standard may, without more,be the basis for a finding of infringement. The case, Fujitsu, LG andPhilips v. Netgear, was heard in the U.S.Court of Appeals for the Federal Circuit.
Philips asserted claims of U.S. Patent No. 4,974,952,Fujitsu asserted claims from U.S. Patent No. 6,018,642 and LG asserted claimsof U.S. Patent No. 6,469,993—all against Netgear. Each patent describes andclaims a different aspect of wireless communications technologies. They accusedNetgear of infringing by implementing wireless networking protocols for sendingand receiving messages between a base station, such as a wireless router, and amobile station, such as a laptop.
The three plaintiffs, part of a licensing pool (ViaLicensing) that purports to include patents that any manufacturer of 802.11 andWMM-compliant products must license. The plaintiffs never identified particularclaims or accused products prior to filing. The plaintiffs argued that bysimply complying with the standard, Netgear necessarily infringed the assertedclaims. The court said the plaintiffs must show evidence of infringement foreach accused product. Fujitsu, LG and Philips appealed the district court'sdenial of summary judgment for infringement and grant of summary judgment fornoninfringement.
Netgear argued that the court should establish a ruleprecluding the use of industry standards in assessing infringement. Instead, Netgearwants any plaintiff to separately accuse and prove infringement for all accusedproducts, even if those products all comply with a standard that is relevant tothe patent-in-suit. It argued that it is legally incorrect to compare claims toa standard rather than directly to accused products. Netgear also argued that aholding that practicing a standard infringes a patent would amount to anautomatic conclusion of infringement against all future accused infringers. Itargued that these later litigants would be deprived of a fair opportunity toprove that their products do not infringe.
An amicus brief filed by the Association of CorporateCounsel, supporting Netgear, argued that it is dangerous to assess infringementbased on a standard because the text of a standard may not be specific enoughto ensure that all possible implementations infringe a patent claim. Further,it argued that many standard sections are optional and that users may neveractivate a potentially infringing feature, and that to allow this type ofanalysis would have a "chilling effect" on industries that rely on standards.It argued that companies would be less likely to comply with industry standardsif a patent owner could argue that all compliant products infringe.
Philips argued that it is more efficient for courts toassess infringement based on industry standards when applicable. It canalleviate the need for highly technical fact-finding, such as the review ofcomplicated source code, and save judicial resources by not requiring thecourts to separately consider products that all function in accordance withthat standard.
The Federal Circuit affirmed that this can certainly be thecase, holding that a district court may rely on an industry standard inanalyzing infringement. If a district court construes the claims and finds thatthe reach of the claims includes any device that practices a standard, thenthis can be sufficient for a finding of infringement. Claims should be comparedto the accused product to determine infringement.
However, if an accusedproduct operates in accordance with a standard, then comparing the claims tothat standard is the same as comparing the claims to the accused product. TheFederal Circuit accepted this approach in Dynacore, where the court held that a claim not infringed bycomparing it to an industry standard rather than an accused product. An accusedinfringer is free to either prove that the claims do not cover allimplementations of the standard or to prove that it does not practice the standard.
Public policy weighs in favor of this approach. If a courtdetermines that all implementations of a standard infringe the claims of apatent, then it would be a waste of judicial resources to separately analyzeevery accused product that undisputedly practices the standard. This is notprejudicial to present or future litigants. If two products undisputedlyoperate in the same manner, a finding of infringement against one will create apersuasive case against the other. In such a case, there will be no prejudice.
However, in many instances, an industry standard does notprovide the level of specificity required to establish that practicing thestandard would always result in infringement. In these cases, the patent ownermust compare the claims to the accused products or, if appropriate, prove thatthe accused products implement any relevant optional sections of the standard.This should help alleviate any concern about the use of standard compliance inassessing patent infringement. Only in the situation where a patent coversevery possible implementation of a standard will it be enough to proveinfringement by showing standard compliance.