Fujitsu Ltd. v. LG Electronics, Inc.

U.S. Philips Corp. (Philips) (plaintiff) was part of a licensing pool holding patents that any manufacturer complying with the Institute of Electrical and Electronic Engineers 802.11 2007 Standard (the 802.11 standard) had to license. Netgear, Inc. (defendant) manufactured products that required compliance with the 802.11 standard. Netgear did not license the products under United States Patent No. 4,974,952 (the 952 patent), which claimed a method for fragmenting messages to send over a wireless network and then defragmenting the messages when received. Fragmentation was optional under the 802.11 standard. Philips sued Netgear in federal court, alleging infringement of the 952 patent. The accused Netgear products were programmed with the option to use fragmentation, but the products defaulted to leaving the fragmentation setting turned off. After claim construction, Philips filed a motion for summary judgment, arguing that Netgear’s compliance with the 802.11 standard established that Netgear infringed the 952 patent. The district court denied the motion and held that because fragmentation was optional, and because the default product setting turned off the fragmentation feature, Philips was required to prove instances of direct infringement to sustain the infringement claim. Philips presented as evidence user manuals describing fragmentation, Netgear advertisements, the 802.11 standard, and records showing that customer-service representatives advised Netgear customers to turn on the fragmentation function for four of the accused products. The district court found that only the customer-service records were evidence of direct infringement. Philips appealed.