On September 20, 2010, the Federal Circuit held that industry standards may be used, independently of comparing claims to the accused product, in determining patent infringement in Fujitsu v. Netgear (No. 2010-1045). While acknowledging that assessing infringement should usually involve comparing patent claims to an accused product, the Court held that comparing the patent claims to a standard instead of the accused product can be the same as comparing the claims to the accused product if certain factual criteria are present. Products that undisputedly operate according to a standard or that are otherwise proved to operate according to a standard can be found to infringe where the patent claims are construed to include any device that practices the standard.

The Court limited its holding with the caution that “[o]nly in the situation where a patent covers every possible implementation of a standard will it be enough to prove infringement by showing standard compliance.” Thus, the Court noted that an accused infringer can defend against such an assertion by proving that the claims do not cover all implementations of the standard, and expressly notes that, in many instances, an industry standard will not provide the level of specificity required to establish that practicing that standard would always result in infringement. The Court also noted that an accused infringer can prove that the relevant section of the standard is optional such that compliance with the standard alone would not establish that the accused infringer has chosen to implement the optional section.

The facts at issue involved three plaintiffs, U.S. Philips Corporation (Philips), Fujitsu Limited (Fujitsu), and LG Electronics, Inc. (LG), asserting patents from a licensing pool covering wireless communication products compliant with the IEEE 802.11 and WMM standards. Philips asserted that Netgear contributed to and induced infringement of a Philips patent because third parties used Netgear’s products to transmit data and fragment messages. The District Court had held that compliance with the fragmentation sections of the 802.11 Standard would result in infringement. However, it further found that those fragmentation sections are optional and thus that fragmentation is not actually required by the standard. Since compliance with the standard would not establish infringement, the District Court required that direct infringement be shown by evidence of customers actually activating the fragmentation feature available on the accused products. The Federal Circuit agreed with the District Court finding that Philips had failed to provide such direct infringement for all but four of the accused models, and summary judgment of non-infringement for all but those four models was upheld.

Nevertheless, the Court also used a claim-to-standard comparison in upholding summary judgment of non-infringement of a patent for ensuring quality communications asserted by LG against Netgear. For this patent, the Court found that the accused products do not infringe as a matter of law because they do not set a priority level for each of a plurality of mobile terminals as required by the claims. In so finding, the Court acknowledged that the accused products implement the WMM Specification and rejected LG’s argument that the WMM Specification required the claimed priority level setting.

Of additional note is the Court’s consideration of policy issues applicable to its holding that industry standards may be used in analyzing infringement. The Court suggested that if a court determines that all implementations of a standard infringe a patent, it would be a waste of judicial resources to analyze separately every accused product that undisputedly practices a standard. The Court further observed that this is not prejudicial to present or future litigants and states that “a finding of infringement against one will create a persuasive case against the other.”