Netgear 2012 Annual Report Download - page 86

Table of Contents NETGEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
remaining for consideration in re-
examination, and the Previously Cancelled Claims are no longer of record in the offensive case by Ruckus against
the Company, there are no remaining claims for re-
examination in the '912 Patent and the '912 Patent cannot be asserted against the Company. Thus,
the Company and Ruckus requested that the Court lift the stay of this litigation and calendar a case management conference. The case management
conference occurred on January 3, 2013. At that time, the Court scheduled a claim construction hearing for August of 2013. The parties to the lawsuit
- the Company, Rayspan, and Ruckus -
also agreed that Ruckus's two offensive cases against the Company and Rayspan should be consolidated
because the cases involve similar complaints and common questions of law and fact and doing so will advance the interests of judicial economy.
Ruckus will file a Second Amended Complaint, which will reflect the consolidation of NETGEAR I and NETGEAR II. The Second Amended
Complaint will remove the '912 Patent that was invalidated during the reexamination from the Consolidated Action. The Court indicated at the
January 3, 2013 Case Management Conference that other than the dropping of the
'912 Patent there should not be a substantial change in the Second
Amended Complaint.
Ruckus served its infringement contentions on the Company on January 17, 2013, and the Company's invalidity contentions are due on March
4, 2013. Discovery has also commenced in the case after approximately four years of inactivity.
On November 19, 2010, the Company filed suit against Ruckus in the U.S. District Court, District of Delaware for infringement of four
of the
Company's patents. The Company alleges that Ruckus's manufacture, use, sale or offers for sale within the United States or importation into the
United States of products, including wireless communication products, infringe United States Patent Nos. 5,812,531, 6,621,454, 7,263,143, and
5,507,035, all owned by the Company. The Company granted Ruckus an extension to file its answer to the Company's suit, and on January 11, 2011,
Ruckus filed a motion to dismiss the Company's suit based on insufficient pleadings. The Company filed its response to Ruckus's motion on January
31, 2011. In addition, on May 6, 2011, Ruckus filed a motion to transfer venue to the Northern District of California. The Court denied Ruckus'
motion to transfer the case to the Northern District of California and granted the Company leave to file an amended complaint rather than address the
Ruckus motion to dismiss based on insufficient pleadings. The Company filed the proposed amended complaint. Nevertheless, Ruckus filed a second
motion to dismiss based on insufficient pleadings by the Company. On March 28, 2012, the Delaware District Court in a memorandum opinion and
order denied Ruckus's second motion to dismiss. A scheduling conference occurred April 18, 2012, and the Company submitted its initial disclosures
in the case on May 15, 2012. On May 31, 2012, Ruckus filed its third motion to dismiss, asserting that the Company cannot sustain its indirect
infringement and willfulness allegations without pleading pre-
suit knowledge of the patents. The Company responded to Ruckus's motion to dismiss
on June 18, 2012. The Court released the schedule for the case on June 8, 2012 with Claim Construction and Summary Judgment Hearings scheduled
for August 9, 2013 and a ten day jury trial scheduled for October 21, 2013. On July 13, 2012, the Company added to its complaint against Ruckus an
allegation of infringement of patent number 6,512,480 (“System and method for narrow beam antenna diversity in an RF data transmission system”
)
by Ruckus's ZoneFlex and MediaFlex products. The Company and Ruckus participated in a court-
ordered mediation on September 13, 2012 in
Delaware, and the parties did not come to an agreement to settle the litigation pending between the parties. Fact discovery closed on December 14,
2012, and the parties are currently working on their expert reports with expert depositions to occur in February and March of 2013. It is too early to
reasonably estimate the financial impact to the Company as a result of the Ruckus litigation matters.
Northpeak Wireless, LLC v. NETGEAR
In October 2008, a lawsuit was filed against the Company and 30 other companies by Northpeak Wireless, LLC (“Northpeak”)
in the U.S.
District Court, Northern District of Alabama. Northpeak alleges that the Company's 802.11b compatible products infringe certain claims of U.S.
Patent Nos. 4,977,577 ("the '577 Patent") and 5,987,058 ("the '058 Patent"). The Company filed its answer to the lawsuit in the fourth quarter of
2008. On January 21, 2009, the District Court granted a motion to transfer the case to the U.S. District Court, Northern District of California. In
August 2009, the parties stipulated to a litigation stay pending a reexamination request to the USPTO on the asserted patents. The reexaminations of
the patents are proceeding. In March 2011, the USPTO confirmed the validity of the asserted claims of the '577 Patent over certain prior art
references. In April 2011, the USPTO issued a final office action rejecting both asserted claims of the '058 Patent as being obvious in light of the
prior art. The case remains stayed by stipulation, and no trial date has been set. The Company does not expect there to be a material financial impact
to the Company because of this litigation matter.
Ericsson v. NETGEAR
On September 14, 2010, Ericsson Inc. and Telefonaktiebolaget LM Ericsson (collectively “Ericsson”)
filed a patent infringement lawsuit
against the Company and defendants D-Link Corporation, D-
Link Systems, Inc., Acer, Inc., Acer America Corporation, and Gateway, Inc. in the
U.S. District Court, Eastern District of Texas alleging that the defendants infringe certain
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