Netgear 2012 Annual Report Download - page 85

Table of Contents NETGEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
OptimumPath's appeal of the District Court's summary judgment rulings before the Federal Circuit on March 5, 2012. On March 7, 2012, the Federal
Circuit affirmed the District Court's summary judgment rulings in favor of the defendants. OptimumPath did not appeal the Federal Circuit's ruling
upholding the District Court's summary judgment rulings, and on June 20, 2012 the Federal Circuit issued its mandate, meaning that the litigation
proceedings are terminated. On June 5, 2012, the parties argued the defendants' appeal of the USPTO rulings before the Federal Circuit, and on
October 2, 2012 the Federal Circuit affirmed the USPTO's rulings, but this outcome had no bearing on the favorable outcome for the defendants
obtained in the litigation proceedings, and this litigation matter is now concluded. There was no material financial impact to the Company because of
this litigation matter.
Ruckus Wireless v. NETGEAR
On May 5, 2008, a lawsuit was filed against the Company by Ruckus Wireless (“Ruckus”), a developer of Wi-
Fi technology, in the U.S.
District Court, Northern District of California (case number C08-2310-PJH (“NETGEAR I”)).
Ruckus alleges that the Company infringes U.S. Patent
Nos. 7,358,912 ("the '912 Patent") and 7,193,562 ("the '562 Patent") in the course of deploying Wi
-
Fi antenna array technology in its WPN824
RangeMax wireless router. Ruckus also sued Rayspan Corporation alleging similar claims of patent infringement. The Company filed its answer to
the lawsuit in the third quarter of 2008. The Company and Rayspan Corporation jointly filed a request for inter partes
reexamination of the Ruckus
patents with the USPTO on September 4, 2008. The Court issued a stay of the litigation while the reexaminations proceeded in the USPTO. On
November 28, 2008, a reexamination was ordered with respect to claims 11
-17 of the '562 Patent, but denied with respect to claims 1-10 and 18-
36.
On December 17, 2008, the defendants jointly filed a petition to challenge the denial of reexamination of claims 1-10 and 18-
36 of the '562 Patent. In
July 2009, the petition was denied, and the remaining claims 11-
17 were confirmed by the USPTO. On December 2, 2008, reexamination was
granted with regard to the '912 Patent. In early October 2009, the Company received an Action Closing Prosecution in the reexamination of the '912
Patent. All the claims of the '912 Patent, with the exception of the unchallenged claims 7 and 8, were finally rejected by the USPTO. On October 30,
2009, Ruckus submitted an “after-final” amendment in the '912 Patent reexamination proceeding. The Company's comments to Ruckus' “after-final”
amendment were submitted on November 30, 2009. On December 1, 2009, the Court found that bifurcating the '562 Patent from the '912 Patent and
commencing litigation on the '562 Patent while the USPTO reexamination process and appeals are still pending would be an inefficient use of the
Court's resources. Accordingly, the Court ruled that the litigation stay should remain in effect. On September 12, 2010, the Company filed the
rebuttal brief in its appeals of the USPTO's rulings during the reexamination of the '562 Patent, and the Company requested an oral hearing with the
Board of Appeals at the USPTO to discuss this brief. On September 13, 2010, Ruckus filed a notice of appeal of the '912 Patent to appeal the adverse
rulings it received from the USPTO in the reexamination of this patent. The Company filed a respondent's brief in the '912 Patent case on January 24,
2011. An oral hearing in the '562 case was set for February 1, 2011, but the Company decided to cancel it and let the USPTO decide the '562 case
based solely on the previously submitted papers. On May 13, 2011, the USPTO indicated that the Company was successful in its appeal of the
examiner's previous decision to allow claims 11-
17 in the '562 reexamination, and the USPTO Board of Appeals reversed the examiner's decision and
declared those claims invalid. On June 13, 2011, Ruckus submitted a request for rehearing by the Board of Appeals of its decision to reject claims 11-
17 of the '562 Patent. On September 28, 2011, the Board of Patent Appeals and Interferences denied Ruckus's request for a rehearing in the '562
Patent reexamination case. Ruckus did not timely file a notice of appeal to the Court of Appeals for the Federal Circuit appealing the USPTO's
cancellation of claims 11-17 of the '562 patent. Therefore, a reexamination certificate will issue with claims 11-17 cancelled and claims 1-10 and 18-
36 confirmed.
On November 4, 2009, Ruckus filed a complaint in the U.S. District Court, Northern District of California (case number C09-5271-
PJH
(“NETGEAR II”)),
alleging the Company and Rayspan Corporation infringe a patent that is related to the patents previously asserted against the
Company and Rayspan Corporation by Ruckus, as discussed above. This asserted patent in this second case is U.S. Patent No. 7,525,486 entitled
“Increased wireless coverage patterns.”
As with the previous Ruckus action, the WPN824 RangeMax wireless router is the alleged infringing device.
The Company challenged the sufficiency of Ruckus's complaint in this new action and moved to dismiss the complaint. Ruckus opposed this motion.
The Court partially agreed with the Company's motion and ordered Ruckus to submit a new complaint, which Ruckus did. The initial case
management conference occurred on February 11, 2010. On March 25, 2010, the Court ordered a stay until the completion of the reexamination
proceedings instigated on the patents in NETGEAR I.
Ruckus and the Company in December of 2012 requested that the stay of the California actions be lifted. This request to lift the stay was
predicated on Ruckus's Withdrawal of Appeal and Cancellation of Claims ("Withdrawal") of the '912 Patent that was on appeal in re-
examination at
the USPTO and that was asserted by Ruckus in NETGEAR I. Through the filing of the Withdrawal, Ruckus announced its intent to withdraw and its
actual withdrawal of its appeal of claims 1, 4-9-14, 18, 19, and 22-29 in re-
examination (the "Appealed Claims"), and Ruckus further announced its
intent to cancel and its actual cancellation of claims 30-31 in re-examination (the "Cancelled Claims"). Claims 2, 3, 15-
17, 20, and 21 had previously
been cancelled during re-
examination (the "Previously Cancelled Claims"). Because the Appealed Claims and the Cancelled Claims represented the
entirety of the claims
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