Hotels, coffee shops, restaurants, supermarkets, and other
commercial users of wireless internet - it might be time to take cover. A federal judge recently rejected several legal claims
filed by Cisco, Motorola and Netgear, paving the way for the continued enforcement
of Innovatio IP Ventures' wireless network patents.
Last week, Innovatio obtained the dismissal of alleged RICO
violations and claims asserting conspiracy, interference with prospective
economic advantage and unclean hands. A
breach of contract claim escaped Innovatio's motion to dismiss. Motorola
Solutions, Inc. v. In re Innovatio IP Ventures, LLC (In re Innovatio IP Ventures, LLC Patent Litig.), 2013 U.S. Dist. LEXIS
15968 (N.D. Ill. Feb. 4, 2013) [enhanced version available to lexis.com subscribers].
Innovatio alleges that by making wireless internet available
to customers or using it to manage internal processes, wireless network users,
such as coffee shops, restaurants and hotels, infringe 17 patents acquired from Broadcom.
Innovatio, which uses pre-suit demand letters as part of its
licensing and enforcement activity, was found to be protected by the Noerr-Pennington doctrine. The Noerr-Pennington doctrine, which derives from the First Amendment's speech and petitioning clauses, was extended by the court to protect pre-suit communications from state and federal claims.
"[The] allegations, taken as true, do not establish that
Innovatio's licensing campaign alleging infringement of the Innovatio Patents
is a sham," the court said. "Accordingly, Innovatio's campaign is protected
petitioning activity under the First Amendment and Noerr-Pennington."
Plaintiffs unsuccessfully argued that because the patents were
subject to a variety of licenses, Innovatio's infringement claims were a sham and
made in bad faith.
"Innovatio ... had a reasonable expectation that at least some
of the products that any given Target used were not covered by any licenses,"
the court said. "It follows that Innovatio's enforcement efforts were not a
sham at the time Innovatio commenced those efforts ...."
Plaintiffs also pointed to Innovatio's purported misrepresentations
These general statements did not make Innovatio's licensing
campaign a sham because they were all peripheral to the question of infringement.
"A misrepresentation," the court said, "can render an
adjudicative proceeding a sham under Noerr-Pennington
only if the misrepresentation is material enough to 'actually alter the
outcome of the proceeding.'"
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