Ericsson, Inc. v. D-Link Sys., Inc., No. 13-1625 (Fed. Cir. 2014)Annotate this Case
Interoperability, enabling electronic devices to charge and connect to the wireless Internet anywhere, requires compliance with technical standards. The Institute of Electrical and Electronics Engineers (IEEE) publishes the prevailing wireless internet standard. Creating such standards involves collaboration; the chosen standard may include technology developed by different parties, which may be covered by patents. Because the standard requires that devices utilize specific technology, compliant devices necessarily infringe certain claims in “standard essential patents” (SEPs), which can inhibit widespread adoption of a standard. IEEE asks SEP owners to pledge that they will grant licenses to an unrestricted number of applicants on “reasonable and nondiscriminatory” (RAND) terms. Ericsson’s patents are SEPs for IEEE’s standard. Ericsson promised IEEE it would offer licenses at a RAND rate. The accused infringers produce devices incorporating Intel’s wireless chips. Dell claimed that it has a license based on its prior agreement with Ericsson’s subsidiary. In Ericsson’s infringement suit, the court rejected that claim and found that D-Link infringed three Ericsson patents; held that the 625 patent was valid over a prior art; found that Intel violated its obligation to negotiate a royalty rate in good faith; and awarded Ericsson $10 million (15 cents per infringing device). The Federal Circuit affirmed two infringement findings, but reversed as to another; affirmed that the 625 patent was not invalid; and vacated the damages and ongoing royalty awards.