Ballard Spahr LLP: Hotel and Resort Owners Targeted by Wireless Patent Infringement Demand Letters

by Carl G. Roberts and Lynn E. Rzonca

Members of the hotel and resort industry have received patent infringement notice letters-and in some cases federal court complaints-from a patent licensing company that claims to own a portfolio of 31 wireless technology patents. That firm, Innovatio IP Ventures LLC, does not sell products or provide services. Instead, it solicits license fees from companies it believes are infringing its patents.

The letters, sent by Innovatio's counsel (the Chicago firm of Niro, Haller & Niro), contend that Innovatio's patents are "controlling patents in the area of WLAN (e.g., Wi-Fi) and mesh networking technologies." According to Innovatio, the patents cover any wireless local area network (WLAN) or Wi-Fi network, including wireless networks that adhere to the IEEE 802.11 standard communication protocols; any implementation of mesh networking technology; and any operation or use of wireless network access or "hotspots."

Innovatio has filed five patent-infringement lawsuits in the Northern District of Illinois, Middle District of Florida, and District of Nevada against hotels, resorts, restaurants, and other companies. Innovatio asserts that its claims apply even to someone who simply plugs in, sets up, and turns on a wireless device if that someone profits by selling access to its customers, uses the network access to "lure" customers into its facility or deliver advertising, or "realize[s] significant efficiency gains in their business by using, for example, wireless handheld devices for taking customer's orders or wireless networks for inventory purposes."

In response to customer requests for indemnification, Cisco Systems, Inc., and Motorola Solutions, Inc., have filed a declaratory judgment action in the District of Delaware against Innovatio. Cisco and Motorola seek a declaration that their products do not infringe the 17 patents asserted in Innovatio's complaints or that the patents are invalid. Innovatio, Cisco, and Motorola are currently arguing in several courts over which case should proceed and where.

If a demand letter is received, you should obtain legal advice promptly. Among the steps that may be recommended are:

  • Conduct a review to determine whether your company is operating a WLAN or wireless hotspot or using wireless networking in any way.
  • Determine whether that use is based on vendor-supplied equipment and related processes. (Contract terms with the equipment vendor may enable an indemnification claim-be sure to give timely indemnification notice to vendors.)
  • Review applicable insurance policies for coverage and notify your agent or carrier promptly if you have a possible claim.
  • Institute a litigation hold on potentially relevant documents and information.

If you have received an Innovatio demand letter or have concerns about your use of wireless networks, contact Carl G. Roberts, 215.864.8120 or cgroberts@ballardspahr.com; Lynn E. Rzonca, 215.864.8109 or rzoncal@ballardspahr.com; or Charley F. Brown, 678.420.9410 or browncf@ballardspahr.com. For concerns specific to your resort or hotel property, contact the co-partners-in-charge of Ballard Spahr's Resort and Hotel Group, Steven D. Peterson, 801.531.3023 or petersons@ballardspahr.com, or W. Michael Clowdus, 303.299.7351 or clowdus@ballardspahr.com.


Copyright © 2011 by Ballard Spahr LLP.
www.ballardspahr.com
(No claim to original U.S. government material.)

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, including electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the author and publisher.

This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.

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