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The U.S. Court of Appeals for the Federal Circuit has set a precedent concerning when district courts can rely on industry standards that include patented technology to decide whether a product meeting those standards infringes the patent. In the court’s unanimous Sept. 20 ruling in Fujitsu Ltd. v. Netgear Inc., Judge Kimberly Moore wrote that “a district court may rely on an industry standard in analyzing infringement” if the reach of the patent claims “includes any device that practices a standard.” She qualified that statement by outlining exceptions: “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.” Moore noted that if the section of the standard that involves a patent is optional, such as the one involving a U.S. Philips Corp. patent at issue in the case, “standards compliance alone would not establish that the accused infringer chooses to implement the optional section.” “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,” Moore wrote. The court’s ruling made three separate findings. It affirmed a summary judgment ruling from the Western District of Wisconsin that Netgear did not infringe the claims of a Fujitsu patent related to wireless communications technology. In addition, it affirmed a summary judgment ruling that Netgear did not infringe the claims of an LG Electronics Inc. patent also related to wireless communications technology. Further, the court affirmed the lower court’s ruling that Netgear did not infringe a Philips patent for a method of transmitting data messages in a communications network, except for four products. For those four products, Philips produced evidence of direct infringement. Judges Daniel Friedman and Alan Lourie joined the opinion. Nina Wang, a partner in the Denver office of Minneapolis-based Faegre & Benson and one of Netgear’s lawyers, said that Netgear is delighted with the Federal Circuit findings of noninfringement. She also noted that the four products accused of infringing the Philips’ patent in question refer to a patent that expired in 2007. Although the court left the door open for plaintiffs to prove infringement by standards compliance, it “made clear you can’t just simply allege standards compliance,” Wang said. She added that the ruling limits the possibility that a plaintiff can prove infringement just by standards compliance, particularly for a complex standard. “You have to both prove that the patent covers every embodiment of the standard and the product complies with that standard,” Wang said. Fujitsu’s lawyers at Morrison & Foerster did not respond to requests for comment. Mark Miller, a San Francisco litigation partner at O’Melveny & Myers who represented Philips’ and LG’s lawyers in the Federal Circuit case, declined to comment. None of the plaintiff companies immediately responded to requests for comment. The ruling is important because “so many cases relate to standards,” said Edward Reines, a patent litigation partner in the Redwood Shores, Calif., office of Weil Gotshal & Manges. Reines submitted an amicus brief on behalf of the Association of Corporate Counsel’s Intellectual Property Committee. “The number of situations in which standards are at issue in patent litigation is substantial and growing,” Reines said. “It’s not uncommon for patent owners to contend that everyone who employs a particular standard infringes. The Fujitsu case will be an important precedent to help understand when reliance on a standard to prove infringement is appropriate and not appropriate.”

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