Fujitsu Limited v. Netgear Inc.

United States Court of Appeals
for the Federal Circuit
__________________________
FUJITSU LIMITED,
Plaintiff-Appellant,
and
LG ELECTRONICS, INC. AND U.S. PHILIPS
CORPORATION,
Plaintiffs-Appellants,
v.
NETGEAR INC.,
Defendant-Appellee.
__________________________
2010-1045
__________________________
Appeal from the U.S. District Court for the Western
District of Wisconsin in case No. 07-CV-0710, Chief Judge
Barbara B. Crabb.
___________________________
Decided: September 20, 2010
___________________________
DEANNE E. MAYNARD, Morrison & Foerster LLP, of
Washington, DC, argued for plaintiff-appellant Fujitsu
Limited. With her on the brief were BRIAN R. MATSUI,
MARC A. HEARRON; and L. SCOTT OLIVER of Palo Alto,
California.
FUJITSU LIMITED v. NETGEAR 2
MARK E. MILLER, O’Melveny & Myers LLP, of San
Francisco, California, argued for plaintiffs-appellants LG
Electronics, Inc., et al. With him on the brief were NORA
M. PUCKETT, MICHAEL SAPOZNIKOW, DAVID S. ALMELING,
SARA JERUSS; and MARK S. DAVIES and JUSTIN FLORENCE,
of Washington, DC.
KENNETH A. LIEBMAN, Faegre & Benson, LLP, of Min-
neapolis, Minnesota, argued for defendant-appellee. With
him on the brief were CHAD DROWN and KEVIN P.
WAGNER; and NINA Y. WANG, PETER J. KINSELLA, and
JACQUELINE T. HARLOW, of Washington, DC.
EDWARD R. REINES, Weil Gotshal & Manges, LLP, of
Redwood Shores, California, for amicus curiae Association
of Corporate Counsel Intellectual Property Committee.
With him on the brief was JILL HO.
__________________________
Before LOURIE, FRIEDMAN, and MOORE, Circuit Judges.
MOORE, Circuit Judge.
U.S. Philips Corporation (Philips), Fujitsu Limited
(Fujitsu), and LG Electronics, Inc. (LG) appeal from a
final judgment of the U.S. District Court for the Western
District of Wisconsin. The district court, on summary
judgment, held that the Defendant, Netgear Inc. (Net-
gear) did not infringe any of the asserted claims. For the
reasons set forth below, we affirm-in-part, reverse-in-part,
and remand.
3 FUJITSU LIMITED v. NETGEAR
BACKGROUND
Each appellant in this case asserted claims against
Netgear. Philips asserted claims of U.S. patent no.
4,974,952 (’952 patent). Fujitsu asserted claims from U.S.
patent no. 6,018,642 (’642 patent). LG asserted claims of
U.S. patent no. 6,469,993 (’993 patent). Each patent
describes and claims a different aspect of wireless com-
munications technologies. The appellants accused Net-
gear 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 ad-
here to standards to ensure interoperability. The in-
fringement allegations in this case involve 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).
The three plaintiffs are part of a licensing pool (Via
Licensing) that purports to include patents that any
manufacturer of 802.11 and WMM compliant products
must license. On June 15, 2005, Via Licensing sent a
letter to Netgear offering to license a set of patents “es-
sential” to the practice of the standard. Of the patents-in-
suit, this letter mentioned only the ’952 patent and ex-
pressly stated that it was not claiming infringement. The
appellants never identified particular claims or accused
products prior to filing the instant action.
After the district court construed the claims, the
plaintiffs filed a first summary judgment motion. In this
motion, the plaintiffs argued that by simply complying
with the standard, Netgear necessarily infringed the
asserted claims. The court denied this motion holding
that the plaintiffs must show evidence of infringement for
FUJITSU LIMITED v. NETGEAR 4
each accused product. Fujitsu Ltd. v. Netgear, Inc., No.
07-CV-0710, 2009 WL 36616, at *1 (W.D. Wis. Jan. 6,
2009) (First Noninfringement Order). The district court
denied the plaintiffs’ subsequent motions for summary
judgment of infringement and granted Netgear’s cross
motion for summary judgment of noninfringement for a
number of reasons related to the specific patents and
products at issue. Fujitsu Ltd. v. Netgear, Inc., No. 07-
CV-0710, 2009 WL 3047616, at *1 (W.D. Wis. Sept. 18,
2009) (Second Noninfringement Order).
Fujitsu, LG, and Philips appeal the district court’s
construction of certain claim terms, its denial of summary
judgment of infringement, and its grant of summary
judgment of noninfringement. We have jurisdiction under
28 U.S.C. § 1295(a)(1).
DISCUSSION
We review a district court’s grant of summary judg-
ment de novo. ICU Med., Inc. v. Alaris Med. Sys. Inc., 558
F.3d 1368, 1374 (Fed. Cir. 2009). Summary judgment is
appropriate when, drawing all justifiable inferences in the
nonmovant’s favor, there exists no genuine issue of mate-
rial fact and the movant is entitled to judgment as a
matter of law. Fed. R. Civ. P. 56(c); Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 255 (1986). We also review
claim construction de novo. Cybor Corp. v. FAS Techs.,
Inc., 138 F.3d 1448, 1455-56 (Fed. Cir. 1998) (en banc).
The words of a claim are generally given their ordinary
and customary meaning as understood by a person of
ordinary skill in the art when read in the context of the
specification and prosecution history. See Phillips v.
AWH Corp., 415 F.3d 1303, 1313 (Fed. Cir. 2005) (en
banc).
5 FUJITSU LIMITED v. NETGEAR
I. ’952 Patent
The ’952 patent claims a method for transmitting data
messages in a communications network. ’952 patent,
abstract. A message is made up of code words. Id. col.2
ll.37-40. To more reliably transfer data, the code words
are broken into segments. Id. The only independent
claim describes a method for segmenting and transmit-
ting a message. Each code word is broken as appropriate
into segments of a predetermined length. The first seg-
ment includes an identifier of the message. The last
segment includes a notification that it is the final seg-
ment. All of the segments in between the first and the
last include incremental segment identifiers that the
receiver can use to determine if a segment fails to arrive.
Philips alleges contributory and induced infringement
for two classes of products: those that only fragment
messages, and those that only defragment messages. In
its First Noninfringement Order, the district court held
that any product that complied with certain sections (for
example, § 9.4) of the IEEE 802.11 Standard infringed the
asserted claims. But in its Second Noninfringement
Opinion, the district court noted that the fragmentation
option is disabled by default in the accused products and
required Philips to show evidence of direct infringement
by users turning on the fragmentation function. The
district court held that 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, respectively. Philips appeals.
A. Contributory Infringement
35 U.S.C. § 271(c) states:
Whoever offers to sell or sells within the United
States or imports into the United States a compo-
FUJITSU LIMITED v. NETGEAR 6
nent of a patented machine, manufacture, combi-
nation or composition, or a material or apparatus
for use in practicing a patented process, constitut-
ing a material part of the invention, knowing the
same to be especially made or especially adapted
for use in an infringement of such patent, and not
a staple article or commodity of commerce suitable
for substantial noninfringing use, shall be liable
as a contributory infringer.
To establish contributory infringement, the patent owner
must show the following elements relevant to this appeal:
1) that there is direct infringement, 2) that the accused
infringer had knowledge of the patent, 3) that the compo-
nent has no substantial noninfringing uses, and 4) that
the component is a material part of the invention. Id.
1. Evidence of Direct Infringement
As an initial matter, Netgear asks us to find no evi-
dence of direct infringement because the district court
relied on the WMM Specification (i.e., § 9.4), rather than
the accused products, in assessing infringement. Netgear
argues that we should establish a rule precluding the use
of industry standards in assessing infringement. 1 Net-
gear argues that we should require a plaintiff to sepa-
rately accuse and prove infringement for all accused
products, even if those products all comply with a stan-
dard that is relevant to the patent-in-suit. It argues that
it is legally incorrect to compare claims to a standard
rather than directly to accused products. Netgear further
argues policy reasons to disallow the use of standards in
infringement determination. Specifically, it argues that a
holding that practicing a standard infringes a patent
would amount to an automatic conclusion of infringement
1 Netgear argues this for all of the patents-in-suit.
7 FUJITSU LIMITED v. NETGEAR
against all future accused infringers. It argues that these
later litigants would be deprived of a fair opportunity to
prove that their products do not infringe.
Amicus Association of Corporate Counsel, supporting
Netgear’s position, argues that it is dangerous to assess
infringement based on a standard because the text of a
standard may not be specific enough to ensure that all
possible implementations infringe a patent claim. Fur-
ther, it argues that many standard sections are optional
and that users may never activate a potentially infringing
feature. Finally, Amicus argues that to allow this type of
analysis would have a “chilling effect” on industries that
rely on standards. It argues that companies would be less
likely to comply with industry standards if a patent owner
can argue that all compliant products infringe.
Philips argues that we have approved the use of stan-
dards in assessing patent infringement in Dynacore
Holdings Corp. v. U.S. Philips Corp., 363 F.3d 1263 (Fed.
Cir. 2004) and Broadcom Corp. v. ITC, 542 F.3d 894 (Fed.
Cir. 2008). It argues that, in these cases, we compared a
standard to the patent claims and determined that the
scope of the claims did not encompass every implementa-
tion of the standard. Although these cases resulted in
findings of noninfringement, Philips argues that they
show our willingness to rely on standards in assessing
infringement.
Philips further argues that it is more efficient for
courts to assess infringement based on industry standards
when applicable. It argues that this can alleviate the
need for highly technical fact-finding such as the review of
complicated source code. It also argues that when a
standard provides the necessary level of specificity, this
saves judicial resources by not requiring the courts to
FUJITSU LIMITED v. NETGEAR 8
separately consider products that all function in accor-
dance with that standard.
We hold 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 ac-
cused 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 ac-
cepted this approach in Dynacore where the court held a
claim not infringed by comparing it to an industry stan-
dard rather than an accused product. An accused in-
fringer 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 prod-
ucts 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 preju-
dice.
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, as with the ’952 pat-
ent, the relevant section of the standard is optional, and
standards compliance alone would not establish that the
9 FUJITSU LIMITED v. NETGEAR
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 com-
pare 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.
In the instant case, the district court held that com-
pliance with the fragmentation sections of the 802.11
Standard would result in infringement of the asserted
claims. However, the district court held that these sec-
tions are optional, that fragmentation is not a require-
ment of the standard. Specifically, the court noted that
the relevant sections of the standard do not require frag-
mentation, they simply describe how to fragment. Second
Noninfringement Opinion, 2009 WL 3047616, at *26.
Therefore, someone could comply with the standard
without fragmenting, and thereby not infringe the patent.
The court noted the undisputed fact that the accused
products are capable of fragmentation, but default to no
fragmentation. In other words, the court relied on the
fact that when a customer purchases the accused product,
it does not fragment until and unless the customer pur-
posely activates this option. Id. at *26-27. The district
court held that unless a customer activated the fragment-
ing option, then there was no direct infringement. There-
fore, the district court held that Philips must show
evidence of direct infringement by showing that custom-
ers actually use the infringing fragmentation features.
FUJITSU LIMITED v. NETGEAR 10
Philips presented user manuals that describe frag-
mentation, advertisements, the 802.11 Standard, and
customer service records that showed when Netgear’s
support staff advised customers to activate fragmenta-
tion. The district court determined that only the cus-
tomer service records were evidence of direct infringement
and noted that Philips presented this evidence for just
four models of the accused products: WPN111, WG511,
WPN824, and WG311T. It held that all other evidence
(customer service manuals, advertisements, etc.) were
only evidence of capability to infringe, and did not amount
to evidence of actual direct infringement.
On appeal, the parties do not dispute that when a
product fragments messages in accordance with § 9.4, it
infringes the asserted claims. They dispute the extent to
which customers activate the fragmentation function and
thus directly infringe. Philips argues that the district
court erred by requiring evidence of direct infringement.
Citing Ricoh Co. v. Quanta Computer Inc., 550 F.3d 1325,
1338 (Fed. Cir. 2009), Philips argues that because the
fragmentation component of the accused products neces-
sarily infringes when it is used, we should presume in-
stances of direct infringement. It further argues that
under Vita-Mix Corp. v. Basic Holding, Inc., 581 F.3d
1317, 1326 (Fed. Cir. 2009), evidence that an accused
device will infringe in some circumstances combined with
the occurrence of those circumstances is sufficient to
support a finding of direct infringement. Philips further
argues that it presented circumstantial evidence of direct
infringement sufficient to withstand summary judgment.
It argues that user manuals describing fragmentation and
the availability of a fragmentation tool are evidence of
direct infringement.
Netgear argues that simply because the accused
products may be capable of infringement does not mean
11 FUJITSU LIMITED v. NETGEAR
that they necessarily infringe. It argues that Ricoh is not
relevant because that case did not present a question of
direct infringement and only addressed whether a product
has substantial noninfringing uses. Netgear also argues
that Philips’ circumstantial evidence does not amount to a
genuine issue of material fact.
We agree with the district court that Philips failed to
establish a genuine issue of material fact regarding direct
infringement for all but the four models with correspond-
ing customer service records. Unless the claim language
only requires the capacity to perform a particular claim
element, we have held that it is not enough to simply
show that a product is capable of infringement; the patent
owner must show evidence of specific instances of direct
infringement. Intel Corp. v. U.S. Int’l Trade Comm’n, 946
F.2d 821, 832 (Fed. Cir. 1991) (holding that the claim
term “programmable selection means” only required that
the infringing product be capable of infringing); Acco
Brands, Inc. v. ABA Locks Mfg. Co., 501 F.3d 1307, 1313
(Fed. Cir. 2007) (holding that the patent owner must show
actual infringement, rather than just the capability to
infringe). The present case is similar to Acco, where the
accused product worked in two modes, only one of which
infringed and the claim was not drawn to the mere capa-
bility to perform an element. Id. The patent owner
presented expert testimony and instructions for the
product that showed it could operate in an infringing
manner. Id. With the exception of the customer service
records, Philips’ evidence shows only that the accused
products are capable of infringement.
The cases cited by Philips are distinguishable from
the present case. In Vita-Mix, there was expert testimony
that certain testing and demonstrations conducted by the
defendant constituted direct infringement. Id. at 1325.
There is no equivalent testimony or evidence here, the
FUJITSU LIMITED v. NETGEAR 12
manuals and expert testing only show that the products
are capable of infringing, they do not provide evidence of
direct infringement. Further, Ricoh is distinguishable
because it dealt with the presence of noninfringing uses
rather than direct infringement. These are two separate
requirements for contributory infringement and Philips
must establish both. We hold that Philips failed to estab-
lish a genuine issue of material fact regarding direct
infringement for all but the four accused models identified
by the district court as being the subject of the relevant
customer service records.
2. Knowledge
For the four models for which Philips presented evi-
dence of direct infringement, the district court held that
Philips failed to establish the knowledge element of
contributory infringement. Second Noninfringement
Order, 2009 WL 3047616, at *29. The district court relied
on its analysis of notice under the patent marking statute,
35 U.S.C. § 287(a). The district court held that letters
from Via Licensing that identified the ’952 patent and
alleged infringement by any 802.11 compliant product
were insufficient as a matter of law to meet this knowl-
edge requirement. Id. at *8-10, 29.
Philips argues that the district court erred by deciding
the knowledge element for contributory infringement by
referring to its § 287(a) analysis. It argues that under
SRI International Inc. v. Advanced Technology Laborato-
ries, Inc., 127 F.3d 1462, 1470 (Fed. Cir. 1997), the letters
from Via Licensing adequately disclosed the identity of
the patent, the activity that may infringe, and a proposal
to abate that infringement. It argues that our case law
requires only that Netgear know of the relevant acts
(practicing the 802.11 Standard) and of the patent itself.
13 FUJITSU LIMITED v. NETGEAR
Philips argues that there are genuine issues of material
fact that preclude summary judgment.
Netgear argues that although the district court relied
on its § 287(a) analysis, it did not err in holding that there
was not adequate knowledge for contributory infringe-
ment. It argues that the contents of the letters from Via
Licensing were insufficient to provide knowledge of the
allegedly infringing products as a matter of law. It argues
that it was not enough to simply identify the patent, but
that Philips must prove that Netgear “knew that the
combination for which [its] component was especially
designed was both patented and infringing,” citing Aro
Manufacturing Co. v. Convertible Top Replacement Co.,
377 U.S. 476, 488 (1964).
We agree with Philips that there are genuine issues of
material fact relating to knowledge that preclude sum-
mary judgment of noninfringement. However, we dis-
agree with Philips’ claim that it need only show that
Netgear knew of the patent and of the relevant acts, not
whether these acts constituted infringement. Our case
law is clear that Philips must show that Netgear “knew
that the combination for which its components were
especially made was both patented and infringing.”
Golden Blount, Inc. v. Robert H. Peterson Co., 365 F.3d
1054, 1061 (Fed. Cir. 2004) (quoting Preemption Devices,
Inc. v. Minn. Mining & Mfg. Co., 803 F.2d 1170, 1174
(Fed. Cir. 1986)). In this case, Philips provided a letter
that identified the ’952 patent and stated that all 802.11
compliant products infringe. Construing all facts in a
light most favorable to Philips, we cannot hold that Net-
gear did not have the requisite knowledge as a matter of
law.
FUJITSU LIMITED v. NETGEAR 14
3. Substantial Noninfringing Uses
Although the district court did not consider the issue,
Netgear argues, as an alternative basis for affirming, that
it cannot be liable for contributory infringement because
the components at issue have substantial noninfringing
uses. It argues that we should look to the fragmentation
threshold tool that allows a user to set the message size
threshold and thus control when fragmentation takes
place. It notes that “more than 40 percent of the available
fragmentation threshold value settings on the accused
products are noninfringing” because they result in no
fragmentation. Appellee’s Br. 51. It argues that these
noninfringing uses are frequent and thus substantial.
Philips argues that Netgear focuses on the wrong part
of the accused products. It argues, citing i4i Ltd. Partner-
ship v. Microsoft Corp., 598 F.3d 831, 849 (Fed. Cir. 2010),
that in determining whether there are substantial nonin-
fringing uses, we must only consider the “particular tool”
in question when that tool is “a separate and distinct
feature” of a larger product. Philips argues that the
fragmentation software and hardware is a “separate and
distinct” tool and it has no uses other than the infringing
method.
We agree with Philips that the component at issue
here is the specific hardware and software that performs
fragmentation. This case is similar to i4i where Microsoft
Word was the larger product, but the infringement allega-
tions focused on the XML Editor within Word. Id. at 849.
We held that the many uses of Word that did not involve
the XML Editor did not constitute substantial noninfring-
ing uses. Id. We held that the XML Editor was “separate
and distinct” from all other functions of Word and that we
should analyze contributory infringement based on this
separable feature, rather than the entire product. Id.
15 FUJITSU LIMITED v. NETGEAR
Likewise, the fragmentation functions of the accused
products in this case are “separate and distinct” features
and we must treat them separately in analyzing contribu-
tory infringement. See id. In the present case, Netgear
argues that because a user can turn off the infringing
features, then there are substantial noninfringing uses.
However, it is undisputed that, when activated, the
product is infringing. Whether a user activates fragmen-
tation is relevant to the extent of direct infringement, but
does not establish substantial noninfringing uses. There-
fore, the undisputed facts establish that the fragmenta-
tion software does not have substantial noninfringing
uses and we cannot affirm summary judgment of nonin-
fringement on this basis.
4. Material Part of the Invention
The district court held that because the claims in-
cluded only fragmenting steps, products that only de-
fragment could not infringe either directly or indirectly.
Second Noninfringement Order, 2009 WL 3047616, at
*24-25. It held that simply because a receiver defrag-
mented a message, this did not mean that the fragment-
ing method of the claims had been employed. Id.
Philips argues that the accused products defragment
messages in accordance with IEEE 802.11 § 9.5, and that
§ 9.5 requires fragmentation using § 9.4 of the standard.
It argues that because the fragmentation of § 9.4 neces-
sarily infringes the asserted claims, then the defragment-
ing products are useful only for infringement and Netgear
should be liable. It argues that the district court agreed
that the mention of “data receivers” in claim 1 makes
defragmentation material to the asserted claims.
Netgear argues that the plain language of § 271(c) re-
quires that the accused component be a “material part of
FUJITSU LIMITED v. NETGEAR 16
the invention.” It argues that the claims do not include
any defragmentation steps and thus a product that only
defragments messages cannot constitute a material part
of the invention.
We agree with Netgear that a product that only de-
fragments messages cannot constitute a “material part” of
a claimed invention drawn solely to fragmentation.
Philips argues that the district court held that the men-
tion of “data receivers” in the claim makes defragmenta-
tion (which would take place at the receiver) a material
part of the invention. But the full quote from the district
court makes it clear that this was not its holding:
I agree that without data receivers capable of de-
fragmenting messages . . . the usefulness of the
claimed method would be lost. Nonetheless, the
claimed method relates only to the fragmentation
portion of the transmission; the patent does not
disclose defragmentation.
Second Noninfringement Order, 2009 WL 3047616, at
*24. We agree with the district court that the asserted
claims include no defragmentation steps and therefore
hold that products that only defragment messages cannot
constitute a “material part” of the invention.
We reverse the district court’s summary judgment of
no contributory infringement for the four accused models
for which Philips showed evidence of direct infringement.
We affirm summary judgment of no contributory in-
fringement for all other models.
B. Induced Infringement
“Whoever actively induces infringement of a patent
shall be liable as an infringer.” 35 U.S.C. § 271(b). To
establish inducement, a patent owner must show that the
accused infringer induced the infringing acts and knew or
17 FUJITSU LIMITED v. NETGEAR
should have known that its actions would induce actual
infringement. DSU Med. Corp. v. JMS Co., 471 F.3d
1293, 1304 (Fed. Cir. 2006). It is not enough to simply
intend to induce the infringing acts. Id. at 1306.
The district court relied on its notice analysis under
§ 287(a) holding that because Netgear did not have notice
of the ’952 patent, Netgear could not have the requisite
intent for inducement. It held that “if defendant did not
know its products might infringe, it would not have been
able to form the intent necessary for a finding of liability.”
Second Noninfringement Order, 2009 WL 3047616, at
*29.
Philips argues that it provided sufficient circumstan-
tial evidence of intent to preclude summary judgment.
Philips relies heavily on Ricoh to argue that when an
accused infringer sells a product with no function other
than to infringe, that party induces infringement. It
further argues that the product manuals and customer
service records are evidence that Netgear encouraged its
customers to use the products in an infringing manner.
Netgear argues that the district court was correct and
that the Via Licensing letters were insufficient to provide
notice of the ’952 patent and allegedly infringing acts. It
argues that without notice of which products allegedly
infringe certain claims, it could not have the requisite
intent to induce infringement.
We hold that there are genuine issues of material fact
that preclude summary judgment of no induced infringe-
ment. There are factual issues regarding the Via Licens-
ing letters, specifically, whether they put Netgear on
notice of the allegedly infringing acts by identifying the
’952 patent and 802.11 compliant products and whether
Netgear had the requisite intent to induce infringement.
We reverse the district court’s summary judgment of no
FUJITSU LIMITED v. NETGEAR 18
induced infringement for the four accused models for
which Philips showed evidence of direct infringement. We
affirm summary judgment of no induced infringement for
all other models.
C. Limitation on Damages
If a plaintiff practices the claimed invention and fails
to mark its product with the relevant patent number,
damages may be limited. 35 U.S.C. § 287(a) states, in
pertinent part:
In the event of failure to so mark, no damages
shall be recovered by the patentee in any action
for infringement, except on proof that the in-
fringer was notified of the infringement and con-
tinued to infringe thereafter, in which event
damages may be recovered only for infringement
occurring after such notice. Filing of an action for
infringement shall constitute such notice.
The district court held that Philips practiced the
claims of the ’952 patent and failed to mark its products.
The district court further held that Philips did not provide
notice to Netgear prior to filing the instant case. Second
Noninfringement Order, 2009 WL 3047616, at *9. It held
that the letters from Via Licensing did not constitute
adequate notice under the statute and that because the
’952 patent expired before filing of the present action,
there could be no damages. Id.
We hold that the district court erred because “[t]he
law is clear that the notice provisions of § 287 do not
apply where the patent is directed to a process or
method.” Crown Packaging Tech., Inc. v. Rexam Beverage
Can Co., 559 F.3d 1308, 1316 (Fed. Cir. 2009). All claims
of the ’952 patent are drawn to a method and we therefore
19 FUJITSU LIMITED v. NETGEAR
find that the district court erred by limiting damages
under § 287.
II. ’642 Patent
The ’642 patent claims a system for reducing power
consumption in mobile devices that access wireless net-
works. ’642 patent col.1 ll.29-31. A wireless network
includes a wireless router, or base station, that is con-
nected to the wired network, such as the Internet. It also
includes a number of mobile stations that communicate
with the base station to send and receive data. The
mobile stations include a wireless communications sub-
system that must be powered on in order to communicate
with the base station. The inventors recognized that, to
conserve power, the wireless subsystem of the mobile
station should be powered down for as much time as
possible. To achieve this end, the patent describes a base
station that sends out beacon signals periodically. Id.
col.11 ll.12-15. A beacon signal serves to notify mobile
stations about network status and any data that is ready
for transmission to the mobile station. Id. There are two
different types of beacon signals. The first type is for all
stations and indicates whether there is data to transfer to
each station. The second type provides information about
the network and is not essential for every station to
receive. Generally, the beacon signals are sent in a
predetermined order at predetermined times. For exam-
ple, the base station sends a first type beacon signal
followed by two second type beacon signals at constant
intervals.
The mobile station’s wireless communication subsys-
tem is configured to only power up in time to receive the
first type beacon signals. See id. fig.15, element u1. After
this signal, the mobile station is capable of receiving data
for a fixed period of time called the data receive-ready
FUJITSU LIMITED v. NETGEAR 20
(DRR) period. Id. col.11 ll.17-21. If a beacon signal
indicates that there is no data to send to the mobile
station, then the mobile station immediately powers off.
Id.
The patent discloses four embodiments of the inven-
tion. Fujitsu asserts claims 2, 6, and 8, which describe a
time extension embodiment where the base station noti-
fies the mobile station that it must stay powered up
beyond the DRR period because of the amount of data to
transfer. Claim 2 states:
A radio communications system comprising:
an intermittent power-on type mobile station for
shifting 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 re-
ceived being defined as a data receive-ready pe-
riod; and
a base station for emanating successive beacon
signals to said intermittent power-on type mobile
station and transmitting data to said intermittent
power-on type mobile station by radio while said
intermittent power-on type mobile station is ready
to receive data from said base station as a result
of control by the individual beacon signal from
said base station;
said base station taking the initiative, if said data
is to be transmitted continuously beyond said data
receive-ready period of said intermittent power-on
type mobile station, to originally report to said in-
termittent power-on mobile station, as time ex-
tension information, that data must be received
beyond said data receive-ready period;
21 FUJITSU LIMITED v. NETGEAR
said intermittent power-on type mobile station be-
ing responsive to said time extension information
from said base station to sustain its power-on
state beyond said receive-ready period until all
pieces of data transmitted continuously from said
base station are received.
(emphasis added to disputed terms). Fujitsu argues that
the district court incorrectly construed the terms “syn-
chronously” and “data receive-ready period” and erred in
granting summary judgment of noninfringement.
A. “synchronously”
The district court construed the phrase “shifting to a
power on state synchronously with a received timing of a
beacon signal” to mean “shifting to a power-on state at the
same time a beacon signal is to be received.” Fujitsu Ltd.
v. Netgear, Inc., 576 F. Supp. 2d 964, 976 (W.D. Wis.
2008) (Markman Order). Below, Netgear argued that the
claim required that the beacon signal activate the mobile
station. The district court rejected this argument based
on the plain language of the claim. Id. It held that “syn-
chronously” does not require that the beacon signal con-
trol the mobile station, only that the beacon signal and
the power on happen “at the same time.” Id.
Fujitsu argues that the district court’s construction is
too narrow. It argues that the term “synchronously” does
not mean “at the same time.” It argues that the term
means that “the shifting to a power-on state has a tempo-
ral relationship with the beacon signal so that the beacon
signal can be received.” It argues that the specification
does not support the district court’s construction. Fujitsu
points first to figure 18, which shows a first step of
“Power-on (Beacon Receiving Timing)” followed by “Re-
ceive Power-Saved Station Control Beacon.” Further, it
FUJITSU LIMITED v. NETGEAR 22
points to figure 19 and argues that it shows a power-on
timing before the beacon signal, rather than at the same
time. Finally, Fujitsu argues that the district court erred
because its construction raises possible issues with pat-
entability. It argues that by construing “synchronous” to
mean “at the same time,” the district court improperly
required a physical impossibility because a system cannot
cause two things to happen at precisely the same time. It
argues that this brings the patentability of the claims into
question and that the courts should construe claim terms
to avoid this issue.
Netgear responds that the district court was correct,
the term “synchronous” must mean “at the same time.”
According to Netgear, Fujitsu’s arguments regarding the
figures are not persuasive because, for example, figure 19
shows a short “ramp-up” period that simply allows the
mobile station to be at full power at the same time it
receives the beacon signal. Netgear also argues that this
construction of synchronously does not require a physical
impossibility. It argues that we addressed a similar
situation in Paragon Solutions, LLC v. Timex Corp., 566
F.3d 1075, 1088 (Fed. Cir. 2009), and held that the term
“real-time” necessarily means a “non-zero amount of
time.” In other words, Fujitsu argues that “synchro-
nously” may mean “at the same time,” but that this will
not require the physical impossibility of two things hap-
pening at the same instant.
We hold that the proper construction of the term is
“just before or at the same time.” This is the only con-
struction consistent with the specification. For example,
the specification shows in figure 19 that the mobile sta-
tion powers on just before the received timing V1 of the
beacon signal:
23 FUJITSU LIMITED v. NETGEAR
Further, figure 18 includes a flow chart with a first step of
“power-on (beacon receive timing)” and a second step of
“receive . . . beacon,” which further supports that these
two events need not happen “at the same time.” The
district court’s construction, urged by Netgear, is too
narrow because it requires the term “synchronous” to
mean “simultaneous.” This would be in direct contradic-
tion to the disclosure of the ’642 patent as evidenced by
figures 18 and 19. We cannot do as Netgear asks and
ignore the clear disclosure of the specification and con-
FUJITSU LIMITED v. NETGEAR 24
strue the term “synchronously” to mean “at the same
time.” Fujitsu’s proposal—some temporal relationship
between the beacon and the power-on timing—is too
broad and amounts to nothing more than a required
ordering. It would only require that the mobile station
power-on sometime before the beacon is sent. This ig-
nores the power saving purpose of the invention and is
not supported by the specification. The object of the
invention involves timing the beacon signals and power-
on timing “so that an improved . . . power-saving can be
realized.” ’642 patent col. 3 ll.45-46. Fujitsu’s proposed
construction would allow for any temporal relationship,
even if the mobile station powered-on long before the
beacon signal thus wasting valuable power resources.
Reading the claim language in light of the specification,
we construe the term to mean “just before or at the same
time.” 2
B. “data receive-ready period”
The district court held that the data receive-ready
(DRR) period 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.” Markman Order,
576 F. Supp. 2d at 975. The court further held that “(1)
the period must be ‘fixed’ and (2) it begins after the in-
termittent power-on type mobile station receives a beacon
2 We agree with Netgear that the “at the same
time” portion of the construction does not require a physi-
cal impossibility. As in Paragon, the phrase “at the same
time” takes into account technological constraints and
necessarily means a “non-zero amount of time.” 566 F.3d
at 1088.
25 FUJITSU LIMITED v. NETGEAR
signal telling it there is data waiting to be transmitted.”
Id. In its order granting summary judgment of nonin-
fringement, the court discussed its construction, stating
that “the access points limit transmission of data during a
fixed period unless they transmit time extension informa-
tion.” Second Noninfringement Order, 2009 WL 3047616,
at *21.
Fujitsu does not contest the district court’s construc-
tion in its Markman Order. However, Fujitsu argues that
the district court amended its construction improperly by
requiring, in its Second Noninfringement Order, that data
only be transmitted during the DRR period unless time
extension information is sent. It argues that the specifi-
cation only requires that the DRR period be “the constant
period after receiving the beacon signal” and it was erro-
neous to add the limitation requiring time extension
information. ’642 patent col.13 ll.61-62. It argues that
the construction is erroneous because the specification
includes embodiments where the access point can con-
tinue to transmit data after the end of the DRR even in
the absence of time extension information. For example,
it argues that in one embodiment, when the mobile sta-
tion does not receive expected data during the fixed
period, it remains powered-on for a predetermined time
beyond the DRR period without the base station sending
any time extension information. Also, Fujitsu argues that
the district court erred by requiring time extension infor-
mation because the same claim term, DRR period, ap-
pears in other (unasserted) claims and does not require
time extension information. For example, Fujitsu points
to claims 3 and 7 which include a nearly identical DRR
period, but do not require time extension information in
order to transmit data outside the DRR period. Fujitsu
finally argues that even if we agree with the district
court’s amended construction, we must remand because
FUJITSU LIMITED v. NETGEAR 26
Fujitsu was deprived of its opportunity to argue infringe-
ment under this construction.
Netgear argues that the district court correctly con-
strued the term in its Markman Order. It argues that the
district court never amended its construction in the
Second Noninfringement Order, but simply looked to the
claim limitations requiring time extension information.
We hold that the district court correctly construed this
claim term in its Markman Order. Further, the district
court did not modify this construction by requiring time
extension information in order to transmit data beyond
the DRR period. The plain language of the claim is clear,
the DRR period is “fixed.” The claim further states
said base station taking the initiative, if said data
is to be transmitted continuously beyond said data
receive-ready period of said intermittent power-on
type mobile station, to originally report to said in-
termittent power-on mobile station, as time ex-
tension information, that data must be received
beyond said data receive-ready period.
The claim expressly requires that, if the base station
wishes to send data after the end of the fixed DRR period,
it must send time extension information. The district
court did not amend its construction, it simply looked to
additional elements of the claim that Fujitsu must show
to establish infringement.
Fujitsu is correct that the specification includes other
embodiments that do not require time extension informa-
tion and other claims describe these embodiments. How-
ever, these embodiments are not the subject of the claims
at issue. Fujitsu’s argument on appeal would have us
read the time extension information limitation entirely
out of the claims. We hold that the district court did not
27 FUJITSU LIMITED v. NETGEAR
err in its construction of the term “data receive-ready
period.” Further, because the district court’s reference to
time extension information did not amount to an amend-
ment to the claim construction, we hold that it did not
deprive Fujitsu of its opportunity to argue infringement
under the correct construction.
C. Infringement
The district court held that there was no genuine is-
sue of material fact regarding infringement and that
Fujitsu failed to establish that the accused products and
standards satisfied the DRR period limitation. Second
Noninfringement Order, 2009 WL 3047616, at *21-22.
The district court relied on tests performed by Fujitsu’s
expert, who configured a base station to transmit beacon
signals every 102 milliseconds. Id. The district court
noted that the initial beacon signal included a “more data”
flag that was set and that the mobile station remained
powered-on to receive data. Id. at *22. The court also
noted that each piece of data also had its “more data” flag
set and the mobile station remained awake after each one.
Id. After 102 milliseconds passed, the second beacon
signal arrived with its “more data” flag set and the mobile
station remained powered-on. Id. Finally, the court
noted that after receiving a piece of data with its “more
data” flag not set, the mobile station powered-down. Id.
The district court held that this evidence showed that
there was no “fixed period” during which the mobile
station could receive data. Id. It relied on the fact that
the mobile station remained available to receive data as
long as the “more data” flag in a data transmission or a
beacon was set. It held there were no genuine issues of
material fact and granted summary judgment of nonin-
fringement. Id.
FUJITSU LIMITED v. NETGEAR 28
Fujitsu argues that because the district court improp-
erly amended its construction, we should remand to give
Fujitsu an opportunity to adduce evidence. Specifically, it
argues that the only issue before the district court in the
summary judgment phase was whether the accused
products remain ready to receive data for a fixed period of
time. But Fujitsu argues that the district court required
it to show that the base station “limit[s] transmission of
data during a fixed period unless they transmit time
extension information.” See Id. at *22. It argues that this
goes beyond the question of whether the mobile station is
ready to receive data for a fixed period of time and we
should remand for further consideration.
Netgear argues that the district court correctly held
that the accused products do not satisfy the DRR period
limitation because they do not remain ready to receive
data for a “fixed” period of time. It points out that, at the
summary judgment stage, Fujitsu argued that the “fixed”
period was the 102 milliseconds between beacon signals
and the district court simply found that the mobile station
was ready to receive data beyond this “fixed” period.
Therefore, Fujitsu cannot establish infringement because
the products do not satisfy this claim element.
We agree with the district court that there is no genu-
ine issue of material fact and that the accused products do
not satisfy the DRR period limitation. The period must be
“fixed.” Markman Order, 576 F. Supp. 2d at 975. Fu-
jitsu’s expert’s tests establish that there is no fixed period
of time that the mobile station is available to receive data.
As long as a piece of data has its “more data” flag set, the
mobile station will remain powered-on to receive data.
While Fujitsu is correct that beacon signals appear to
arrive at fixed intervals, they do not create a fixed period
of time during which the mobile station may receive data
because the same tests show the mobile station remaining
29 FUJITSU LIMITED v. NETGEAR
powered-on after the period has ended. 3 There is no
genuine issue of material fact that the accused products
do not satisfy the DRR period limitation and therefore we
affirm the district court’s grant of summary judgment of
noninfringement of the asserted claims of the ’642 patent.
III. ’993 Patent
The ’993 patent discloses a method for ensuring qual-
ity of service in a communications network. ’993 patent,
abstract. The patent describes a plurality of mobile
terminals each having a priority value. Id. col.1 l.67-col.2
l.2. There is no limit to the number of priority values
available. Id. The base station, considering the overall
traffic load, groups the priority values into batches that
correspond to ranges of priority values. Id. col.3 ll.33-37.
The base station provides these groupings to the mobile
terminals. Id. col.3 ll.61-63. For example, the base
station could define group 1 (priority levels 1 through 50)
and group 2 (priority levels 51 through 100). The base
station then sends a message to all mobile stations in-
forming them which group may transmit, blocking all
other mobile terminals. Id. col.4 ll.24-32. LG asserts
independent claim 25:
A method of controlling traffic a [sic] mobile com-
munication system, comprising the steps of:
setting a priority level of each of a plural-
ity of mobile terminals; and
3 The 802.11 Standard even allows a mobile station
to remain powered-on indefinitely when an expected piece
of data does not arrive. 802.11 Standard § 11.2.1.8 This
indefinite availability further shows that there is no
“fixed” period of time during which the mobile station can
receive data.
FUJITSU LIMITED v. NETGEAR 30
dynamically controlling data transmis-
sions of each of the plurality of mobile
terminals in accordance with the priority
level of each mobile terminal and a con-
gestion level of the communication system,
wherein each of the mobile terminals is
assigned to a priority group according to
the priority level of the corresponding mo-
bile terminal, and wherein a base station
dynamically controls data transmission of
each of the mobile terminals by transmit-
ting a priority group number to each of the
mobile terminals indicating which groups
are authorized to transmit data, and
wherein mobile terminals assigned to a
priority group that is not authorized to
transmit are temporarily blocked from
transmitting while maintaining a physical
channel.
The accused products implement the WMM Specifica-
tion. The WMM Specification is a complement to the
802.11 standard that outlines a set of structures and
methods to ensure better quality of service within an
802.11 compliant network. WMM Specification § 1.1.
The 802.11 standard and the WMM Specification op-
erate on a time-slotted system. This means that the base
station and mobile stations synchronize and the base
station allots individual segments of time (slots) for the
stations to transmit. In order to limit contention for time
slots, the WMM specification describes a protocol for
ensuring quality of service. Id. Each terminal analyzes
its queue of messages to send and assigns a message type
– e.g., voice, video, text, etc. An individual terminal
assigns priority values to each message in its queue. Id.
§ 3.3.1. The terminal then groups these prioritized mes-
31 FUJITSU LIMITED v. NETGEAR
sages into Access Categories defined by the base station,
which correspond to Contention Windows. Id. Conten-
tion Windows are sets of time slots that each Access
Category may transmit in. 4 For high priority Access
Categories, such as voice, the Contention Window is very
short. For example, a voice packet may have a Conten-
tion Window of 5 slots, meaning that the terminal must
randomly select one of the next 5 slots to transmit. A
video packet may have a Contention Window of 10 slots,
meaning that the mobile station must randomly select one
of the next 10 slots to transmit.
The district court held that the accused products do
not infringe claim 25 as a matter of law because they do
not “set[ ] a priority level of each of a plurality of mobile
terminals.” First Noninfringement Order, 2009 WL
36616, at *8; Second Noninfringement Order, 2009 WL
3047616, at *15. The court held that the WMM Specifica-
tion requires message priority based only on the type of
data, not terminal priority. Second Noninfringement
Order, 2009 WL 3047616, at *14-15. It rejected LG’s
argument that the terminals essentially adopt the priority
of the highest priority message they have to transmit.
The court stated that if it accepted the “adoption” argu-
ment, “the purpose of the patented invention would be
defeated” because it would render the claim term “termi-
nal” meaningless. Id. at *14. Further, “[a]lthough the
patented method is broad enough to cover a method that
makes message type one consideration in determining a
terminal’s priority level, the idea of message type as one
consideration is different from the idea of message type as
the only consideration.” Id. at *15 (emphasis in original).
4 The Contention Windows are expanded by adding
a “back-off time” in accordance with the Access Category.
A higher priority category corresponds to a shorter back-
off time.
FUJITSU LIMITED v. NETGEAR 32
LG argues that the district court erred and that the
WMM Specification requires “setting a priority level of
each of a plurality of terminals.” LG argues that the
district court, in its Second Noninfringement Order,
improperly construed the claim term “setting a priority
level . . .” by holding that message priority could not be
the sole basis for determining terminal priority. It argues
that we should reject this claim construction and remand
with instructions that message priority can equate to
terminal priority. LG argues that the patent discloses
using message priority to determine terminal priority.
Specifically, LG points to claim 27 that states “the priority
level of each mobile terminal is set in accordance with a
waited quantity, a served quantity, and a constant value
based on a predefined priority.” LG argues that this
shows that information about messages, such as a waited
quantity, may be used to determine the terminal priority
of the claims.
LG further argues that the district court erred by not
equating the message priority of the WMM Specification
to the terminal priority of the claims. It argues that
“[e]ach terminal adopts the [access category] of the high-
est priority message queued in the terminal as the prior-
ity level of that terminal.” Appellant’s Br. at 57-58.
Netgear argues that the district court was correct in
determining that the WMM Specification requires mes-
sage, rather than terminal, priority. It argues that the
waited quantity and served quantity of claim 27 relate to
the amount of traffic at a terminal rather than the type of
message. It argues that the patent specification is clear
that only terminal priority affects message transmission,
not message priority. It argues that the WMM Specifica-
tion assigns priorities to message types. For example,
Netgear points out that voice has a higher priority and
33 FUJITSU LIMITED v. NETGEAR
shorter contention window than video, but this priority
does not attach to the terminal.
We agree with the district court that the accused
products do not infringe claim 25 as a matter of law. The
WMM Specification is clear that it assigns priority to
message type rather than terminal. WMM Specification
§ 3.3.1. LG’s argument that a terminal adopts the prior-
ity of the highest priority message in its queue is unavail-
ing because of the way that the WMM Specification
structures its contention windows. LG concedes that the
contention windows of the WMM Specification overlap.
Appellants’ Br. 58. In other words, voice data may have a
contention window of time slots 1 to 5 while video data
has a contention window of time slots 1 to 10. While the
voice data is more likely to transmit before the lower
priority video data, the overlap in the contention windows
means that the lower priority data could transmit first.
For example, a station with video data could randomly
transmit in slot 2 while a station with voice data ran-
domly transmits in slot 5. In this instance, the higher
priority data transmits after the lower priority data. This
shows that the stations do not adopt any transmission
priority of queued messages.
The WMM Specification explicitly assigns priority
levels to messages, not to terminals. The undisputed fact
that a lower priority message may transmit before a
higher priority message shows that the terminals do not
adopt the priority level of the highest priority message.
Although LG is correct that claim 27 contemplates using
message traffic as a part of determining “terminal” prior-
ity, this does not change the fact that the WMM Specifica-
tion does not require setting a terminal priority. Because
there is no genuine issue of material fact that the accused
products do not “set[ ] a priority level of each of a plurality
FUJITSU LIMITED v. NETGEAR 34
of terminals,” we affirm the district court’s grant of sum-
mary judgment of noninfringement.
IV. Conclusion
Because the district court correctly granted summary
judgment of noninfringement of the asserted claims of the
’642 and ’993 patents, we affirm. Regarding the ’952
patent, we affirm summary judgment of noninfringement
for all products but the four models for which Philips
produced appropriate evidence of direct infringement.
For these four models, we reverse the district court’s
summary judgment of no contributory and no induced
infringement because genuine issues of material fact
remain.
AFFIRMED-IN-PART, REVERSED-IN-PART, and
REMANDED
Costs
No costs.