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Fujitsu v. Netgear, Inc was a patent infringement case centered around three patents claimed to be required for full compliance of the IEEE 802.11 (WiFi) standard and the WiFi Alliance Wireless Multi-Media (WMM) Specification. US patents 4.974,952, 6,018,642, and 6,469,993 were owned by Philips Electronics, LG Electronics, and Fujitsu respectively, and placed in the Via Licensing pool. The Via Licensing pool claimed to hold all patents required for a complete WiFi/WMM implementation and Netgear did not enter an agreement with Via Licensing. Fujitsu sued claiming a complete implementation of the WiFi standard implied violating patents held by Via Licensing pool. When tried in United States District Court for the Western District of Wisconsin, the court granted summary judgment of non-infringement by Netgear for all three patents ; however, Fujitsu appealed the district court’s decision. The United States Court of Appeals for the Federal Circuit confirmed non-infringement for two of the three patent and found infringement of the third patent in four of Netgear's products.

Issue
Fujitsu's suit was based upon "the theory that networks conforming with IEEE standard also conformed to the patent in suit". Stated simply, Fujitsu made the claim if Netgear's devices were compliant with the 801.11 standard and given Fujistu's patents were part of the required intellectual property for a complete implementation, then Netgear should be liable for direct infringement. Fujitsu licensed patents 4,974,952, 6,018,642, and 6,469,993 through Via Licensing to manufacturers of WiFi devices. Netgear did not enter into a licensing agreement with Via Licensing. The central issue in the suit was to determine if Netgear's WiFi devices infringement upon the patents under consideration.

US patent 4,974,952
US patent 4,974,952 claims a method of transmitting data in a wireless network, specifically fragmenting large messages into smaller messages to avoid resending large amounts of data if network transmission errors occur. While fragmentation is an optional component of the IEEE 802.11 specification and Netgear products did not enabled fragmentation by default, all products were able to defragment messages. End users could enable fragmentation through software control. Philips claimed contributory infringement in devices that fragment and induced infringement for devices that defragment.

The district court held “unless a customer activated the fragmenting option, then there was no infringement” and “the notice letters sent by Philips prior to the instant suit were not sufficient to establish the knowledge and intent elements of contributory and induced infringement”. In addition, the district court states the initial notice of patent infringement was not sufficient to establish Netgear’s knowledge of infringtement.

The federal court of appeals references to determine contributory infringement. Specifically, the patent owner must show: “1) that there is direct infringement, 2) that the accused infringer had knowledge of the patent, 3) that the component has no substantial non-infringing uses, and 4) that the component is a material part of the invention”. To determine direct infringement, the court states “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” ;however, the court softens their statement with the following “We acknowledge, however, that 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”. Netgear customer service had recommended end-users enable fragmentation on four models (WPN111, WG511, WPN824, and WG311T). The appeal court decided enabling fragmentation on those specific models constituted direct infringement.

The court decided Philip’s notices of infringement provided Netgear sufficient knowledge of infringement. Likewise, the court cannot find substantial non-infringing uses of wireless fragmentation. When considering material part of invention, the district court claims defragmentation doe not infringe US patent 4,974,952 as it only made material claims of fragmentation techniques. Weighing all four elements of direct infringement, the federal court reversed the district court’s summary judgment for non-infringement Netgear’s models WPN111, WG511, WPN824, and WG311T.

In addition, the federal court overruled the district court’s limitation on damages. allows limited damages when a patent holder uses their claimed invention without clearly marking the product with the relevant patent number. The federal court held the district court was in error as does not apply to any patent directed a method and US patent 4,974,952 explicitly claimed a method for fragmentation.

US patent 6,018,642
The second patent under consideration in this case is US patent 6,018,642, owned by Fujitsu. The patent under consideration claimed “a system for reducing power consumption in mobile devices that access wireless networks" . The system entails two types of beacon signals: one that alerts mobile stations of any pending transfers while the other signal provides network topology information.  Mobile stations power-up to receive the first type of signal and if no data is available, immediately power off.  The idea behind this patent is to keep the wireless radio in a low-power state as much as possible to preserve energy.

In both the district and circuit court, potential infringement centered on the definition of “synchronous”. In Fujitsu’s patent, the function of the alert beacon signal is described as “an intermittent power-on type mobile station for shift to a power-on state synchronously with a received timing of a beacon signal, with a fixed period of time after the beacon signal has been received being defined as a data receive-ready period”. The district court interpreted the language of the patent to imply the alert signal does not necessarily control the base station but requires the base station power-on and beacon signal occur “at the same time”.

During the appeal, Fujitsu claimed synchronously does not mean “at the same time”. Instead, Fujitsu stated synchronously means: “the shifting to a power-on state has a temporal relationship with the beacon signal so that the beacon signal can be received.” In addition, Fujitsu argued that the district courts definition of synchronous would require two events to occur at precisely the same time which they state is a physical impossibility. Netgear argued the district court’s interpretation is correct. The circuit court defined synchronous to mean “just before or at the same time”.

The district court stated the DDR is “a fixed period of time during which an intermittent power-on type mobile station is in its power-on state and prepared to receive data, with the period beginning immediately after the intermittent power-on type mobile station receives the first beacon signal telling it there is data to be transmitted to it”. The corollaries of the district court’s rulings are the period must have a fixed length and the receive period begins with the wake-up alert beacon signal. In addition, Fujitsu’s patent claims “if the base station wishes to send data after the end of the fixed DDR period, it must send time extension information”.

The district court allowed Fujitsu’s expert witness to demonstrate a WiFi system configured to transmit an alert signal every 102 milliseconds. The district court reported that the Netgear system remained on as long as a “more data” flag or the alert beacon was enabled. If the beacon was inactive or the “more data” flag was not set, the system immediately powered down. This proved Netgear’s system does not have a fixed data receive period. Given the evidence from the district court’s experiment, the circuit court affirmed the district court’s grant of summary judgment of non-infringement.

US patent 6,469,993
The final patent under consideration was 6,469,993 owned by LG Electronics. This patent described a system of for quality of service in a communications network where the base station assigns priority to different clients and traffic types. Specifically, the LG patent grants individual terminals priority levels. The district court held the WMM Specification states that priority is assigned to traffic types not to individual terminals. The appeals court confirmed the district’s judgment of non-infringement for US patent 6,469,993.

Holding
The appeals court decided on September 20, 2010 that Netgear was not liable for infringement of US patents 6,018,642 and 6,469,993. Infringement of US patent 4,974,952 occurred in the four specific models Netgear consumer support recommended enabling packet fragmentation.