Netgear 2011 Annual Report Download - page 97

Table of Contents
alleges that the Company and the other defendants have infringed and continue to infringe the Ericsson patents through the defendants’ IEEE
802.11-compliant products. In addition, Ericsson alleges that the Company has infringed, and continues to infringe, the claimed methods and
apparatuses of the ‘468 Patent through the Company’s PCMCIA routers. The Company filed its answer to the Ericsson complaint on
December 17, 2010 where it asserted the affirmative defenses of noninfringement and invalidity of the asserted patents. On March 1, 2011, the
defendants filed a motion to transfer venue to the District Court for the Northern District of California and their memorandum of law in support
thereof. On March 21, 2011, Ericsson filed is opposition to the motion, and on April 1, 2011, defendants filed their reply to Ericsson’
s opposition
to the motion to transfer. On June 8, 2011, Ericsson filed an amended complaint that added Dell, Toshiba and Belkin as defendants. At the status
conference held on Jun 9, 2011, the Court set a Markman hearing for June 28, 2012 and trial for June 3, 2013. On June 14, 2011, Ericsson
submitted its infringement contentions against the Company. On September 29, 2011, the Court denied the defendants motion to transfer venue
to the Northern District of California. Discovery is ongoing. The parties are now approaching the Markman hearing, and the schedule is as
follows: March 9, 2012—exchange of proposed constructions of claim terms; April 9, 2012—Joint Claim Construction Statement filing
deadline; May 4, 2012—Ericsson’s Markman brief; May 16, 2012—Tutorials due; June 1, 2012—Defendants Markman brief; June 15—
Ericsson’s Reply Markman brief; and June 28, 2012—Markman hearing.
Fujitsu v. NETGEAR
On September 3, 2010, Fujitsu filed a complaint against the Company, Belkin International, Inc., Belkin, Inc., D?Link Corporation, D?
Link Systems, Inc., ZyXEL Communications Corporation, and Zyxel Communications, Inc in the U.S. District Court, Northern District of
California alleging that certain of the Company’s products infringe upon Fujitsu’s U.S. patent Re. 36,769 patent (‘769 Patent) through various
cards and interface devices within the Company’s products. The Company answered the complaint denying the allegations of infringement and
claiming that the asserted patent is invalid. In addition, the Company filed a motion to disqualify counsel for Fujitsu. The Company’s
disqualification motion was argued before the Court on December 16, 2010, and on December 22, 2010, the Court granted the Company’s
motion and disqualified counsel for Fujitsu. In response, Fujitsu requested a stipulation from all parties to reset the case management conference
and scheduled hearing dates for the motions to dismiss. The initial case management conference was held on March 18, 2011. A claim
construction hearing was held on October 14, 2011. On February 3, 2012, the Court issued its claim construction order based on the claim
construction hearing. The parties are currently participating in the discovery process. Expert reports and accompanying discovery opens May 4,
2012 and closes June 8, 2012. Dispositive motions are due June 28, 2012, and trial is set to commence on November 26, 2012.
Data Network Storage, LLC v. NETGEAR
In April 2009, a lawsuit was filed against the Company and 14 other companies by Data Network Storage, LLC (“DNS”) in the U.S.
District Court for the Southern District of California. DNS alleges that the Company and the other third parties infringe U.S. Patent No.
6,098,128. In particular, DNS is alleging that several of the Company’s ReadyNAS products infringe upon DNS’s patents. The Company filed
its answer to the lawsuit in July 2009 and asserted that DNS’s patents were both invalid and had not been infringed upon by the Company. In
September 2009, at a Court-sanctioned early neutral evaluation, the parties were unable to reach an agreement on a settlement, and discovery
continued. On January 27, 2010, the Court denied co-defendant Fujitsu America, Inc.’s motion to stay the litigation, and the Company submitted
its invalidity contentions on February 1, 2010. The Company and the plaintiff entered into settlement discussions in early March. Without
admitting any wrongdoing or violation of law and to avoid the distraction and expense of continued litigation and the uncertainty of a jury
verdict on the merits, the Company agreed to make a one-
time lump sum payment in consideration for a fully paid and perpetual license to, and a
covenant not to sue on, the ‘128 patent and the plaintiff’
s entire portfolio of U.S. patents, related patents, and foreign counterparts. The Company
has made the required one-time lump sum payment, and the lawsuit by DNS against the Company was dismissed with prejudice on April 23,
2010. This arrangement did not have a material impact on the Company’s consolidated financial position, results of operations, or cash flows for
the year ended December 31, 2010.
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