Netgear 2013 Annual Report Download - page 90

Table of Contents NETGEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
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 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
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 would advance the interests of
judicial economy.
Ruckus served its infringement contentions on the Company on January 17, 2013, and the Company's invalidity contentions were served on
Ruckus on March 4, 2013. On March 5, 2013, Ruckus and Rayspan filed a stipulation with proposed order dismissing Rayspan from the case, and, on
March 6, 2013, the Court dismissed with prejudice Rayspan. On March 14, 2013, Ruckus filed its Second Amended Complaint, as ordered by the Court.
Ruckus did not add any patents, but attempted to add claims of breach of contract and misappropriation of trade secrets by the Company. The Company
believed that Ruckus contravened the Court's order that there should not be a “substantial change”
in the Second Amended Complaint by adding the
breach of contract and misappropriation of trade secrets claims to the lawsuit. Consequently, the Company filed a Motion to Strike the newly added
claims. On May 22, 2013, the Court granted the Company's motion to strike the state law claims of trade secret misappropriation and breach of contract
from the Second Amended Complaint. On June 10, 2013, Ruckus filed its Motion for Leave to Amend and File its Third Amended Complaint, adding
back the trade secret misappropriation and breach of contract claim. The Company responded on June 24, 2013, and the parties orally argued the motion
and response on July 24, 2013. On July 29, 2013, the Court denied Ruckus's Motion for Leave to Amend and File its Third Amended Complaint,
meaning the Court would not allow Ruckus to bring its breach of contract claims or trade secret misappropriation claims because they were time barred.
In May 2013, the parties filed their Joint Claim Construction Statement where the parties indicated to the Court the disputed claim language, the
parties' competing constructions, and the evidence in support of the parties' positions. Ruckus then filed its opening claim construction brief on June 18,
2013 and the Company filed its reply on July 1, 2013. The parties gave a claim construction tutorial to the Court on August 16, 2013, and, on August 28,
2013, the parties argued their proposed claim constructions before the Court. On December 16, 2013, the Court denied Ruckus’
s attempt to strike the
Company’
s invalidity arguments and issued its claim construction order. On January 31, 2014, the Company and Ruckus entered into a settlement
agreement that settled all outstanding litigation between the parties thereby concluding this litigation.
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 alleged 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, infringed 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 expert discovery also closed.
In addition, all claim construction and summary judgment briefing was finished. On August 9, 2013 the parties argued their claim construction and
summary judgment briefing before the Court. On September 30, 2013, the Court dismissed the asserted claims of three of the Company’s five patents
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