Federal Circuit affirms limited use of industry standards in assessing patent infringement: Fujitsu Ltd. v. Netgear Inc. (Sept. 20, 2010)

In Fujitsu Ltd. v. Netgear Inc., 2010 U.S. App. LEXIS 19543 (Fed. Cir. Sept. 20, 2010), the patents described and claimed a different aspect of wireless communications technologies. Appellants accused Netgear of infringing by implementing wireless networking protocols for sending and receiving messages between a base station, such as a wireless router, and a mobile station, such as a laptop. Products in this industry adhere to standards to ensure interoperability. The infringement allegations in this case involved two standards: the Institute of Electrical and Electronics Engineers 802.11 2007 Standard (802.11 Standard)  and the Wi-Fi Alliance Wireless Multi-Media Specification, Version 1.1 (WMM Specification).

Netgear asked the Federal Circuit to find no evidence of direct infringement because the district court relied on the WMM Specification, rather than the accused products, in assessing infringement. Arguing for a rule precluding the use of industry standards in assessing infringement, Netgear asserted that a plaintiff should be required to separately accuse and prove infringement for all accused products, even if those products all comply with a standard that is relevant to the patent-in-suit. Basically, Netgear asserted that it was legally incorrect to compare claims to a standard rather than directly to accused products.

Appellants responded by citing Dynacore Holdings Corp. v. U.S. Philips Corp., 363 F.3d 1263 (Fed. Cir. 2004) [enhanced version available to lexis.com subscribers /  unenhanced version available from lexisONE Free Case Law] as precedent for using standards in assessing patent infringement. Appellants also argued that it was more efficient for courts to assess infringement based on industry standards when applicable, thereby alleviating the need for highly technical fact-finding. Furthermore, appellants argued that when a standard provided the necessary level of specificity, this saved judicial resources by not requiring the courts to separately consider products that all function in accordance with that standard.

In addressing these arguments, the Federal Circuit held that:

a district court may rely on an industry standard in analyzing infringement. If a district court construes the claims and finds that the reach of the claims includes any device that practices a standard, then this can be sufficient for a finding of infringement. We agree that claims should be compared to the accused product to determine infringement. However, 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. We accepted this approach in Dynacore where the court held a claim not infringed by comparing it to an industry standard rather than an accused product. An accused infringer is free to either prove that the claims do not cover all implementations of the standard or to prove that it does not practice the standard.

Public policy weighs in favor of this approach. If a court determines that all implementations of a standard infringe the claims of a patent, then it would be a waste of judicial resources to separately analyze every accused product that undisputedly practices the standard. This is not prejudicial to present or future litigants. If two products undisputedly operate in the same manner, a finding of infringement against one will create a persuasive case against the other. In such a case, there will be no prejudice.

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. Or . . . the relevant section of the standard is optional, and standards compliance alone would not establish that the accused infringer chooses to implement the optional section. In these instances, it is not sufficient for the patent owner to establish infringement by arguing that the product admittedly practices the standard, therefore it infringes. In these cases, the patent owner must compare the claims to the accused products or, if appropriate, prove that the accused products implement any relevant optional sections of the standard. This should alleviate any concern about the use of standard compliance in assessing patent infringement. Only in the situation where a patent covers every possible implementation of a standard will it be enough to prove infringement by showing standard compliance.

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