Netgear Failed to License Patent on RAND Terms Under Wi-Fi Alliance Rules: TP-Link
Netgear breached its contractual obligation as a member of the Wi-Fi Alliance to grant licenses to its patented A dual band spectrum allocation system technology (U.S. Patent No. 7,936,714) on reasonable and nondiscriminatory (RAND) terms when it pursued an International Trade Commission exclusion order against TP-Link routers, alleged TP-Link's breach of contract complaint Monday (docket 5:24-cv-03478) in U.S. District Court for Northern California in San Jose.
Netgear's proper course of action would have been to first offer TP-Link a licensing proposal, said the complaint.
TP-Link further seeks a judicial declaration regarding Netgear’s obligation to grant a license for TP-Link products under appropriate RAND terms, said the complaint. As a member of the Wi-Fi Alliance, Netgear is obligated to grant licenses to industry participants such as TP-Link on RAND terms for its patent claims that are necessary to implement technical specifications of the alliance, said the complaint.
The Wi-Fi Alliance seeks to promote widespread marketplace adoption and interoperability for Wi-Fi products made by multiple manufacturers through testing and certification, the complaint said. As a Wi-Fi Alliance member, Netflix is bound by licensing obligations with regard to test plans, it said. As owner of the '714 patent, Netgear contends in litigation it filed April 3, 2023, that claim 13 of the patent is necessarily infringed by certain functionality that’s required to implement portions of the Wi-Fi Alliance test plans, it said
Netgear's action against several TP-Link entities in the ITC seeks to exclude TP-Link products from importation to the U.S. due to alleged infringement of several patents, including '714, the complaint said. Netgear filed its exclusion order lawsuit without first offering a license for TP-Link products, and the company continues to “aggressively pursue exclusion of TP-Link’s products” from the U.S. market under claim 13 of the ’714 patent, while “declining TP-Link’s requests for a licensing proposal that would resolve the parties’ disputes,” it said.
On May 30, the ITC administrative law judge issued an initial determination adopting certain assertions made by Netgear, under which claim 13 of the '714 patent is infringed by TP-Link, said the complaint. Under the rulings, claim 13 of the patent is a “necessary claim” subject to licensing obligations under Wi-Fi Alliance policy, it said. If affirmed, the initial determination will result in an exclusion order against importation of TP-Link products into the U.S. by Dec. 2, with imposition of a 100% bond for prior importations during an interim period beginning Oct. 3, it said.
Netgear has breached its licensing obligation and engaged in “the very conduct" that the Wi-Fi Alliance's intellectual property rights policy "is supposed to avoid,” alleged the complaint. TP-Link’s lawsuit seeks to remedy Netgear’s “improper attempt to eliminate fair marketplace competition with its efforts to wrongfully exclude" TP-Link’s routers from the marketplace, it said. The suit also addresses the “imminent threat of severe harm to TP-Link’s business operations” from the May 30 ITC initial determination arising from Netgear’s “breach of its licensing obligations.”
TP-Link seeks a preliminary injunction, followed by a permanent injunction, restraining Netgear from pursuing an ITC exclusion order against its products under asserted claim 13 of the '714 patent and from enforcing any such injunctive relief against TP-Link products "in violation of Netgear’s contractual licensing obligation," said the complaint. The plaintiff also seeks an order requiring Netgear to grant a license for TP-Link products under the '714 patent on RAND terms and to refrain from conduct “inconsistent with Netgear’s contractual licensing obligation," plus damages. Netgear didn't comment Tuesday.