Wireless Network Patent Owner Accusing Electricity Coops of Infringement

by Eversheds Sutherland (US) LLP
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Recently many members of the coop community have received patent licensing letters from a business called Innovatio IP Ventures, LLC. Innovatio is a patent licensing business – sometimes referred to as a non-practicing patent entity, or NPE. It makes money by obtaining patents and licensing them to businesses that believe they need a license to cover their operations.

Innovatio has demanded license fees from a wide variety of businesses and has filed four lawsuits this year accusing hotels, restaurants and other public facilities of patent infringement because they offer Wi-Fi access at their facilities. Innovatio can make these allegations because U.S. law defines a patent infringer as any person who “without authority makes, uses, offers to sell or sells any patented invention,” or imports it into the U.S. The law does not require proof that the accused infringer is making money from the alleged infringing activity.

Innovatio contends that its 31 patents are “controlling patents in the area of WLAN (e.g., Wi-Fi) and mesh networking technologies.” The letters notify the recipients of their “likely infringement” of those patents, based on Innovatio’s belief that virtually any wireless local area network (WLAN), or any Wi-Fi network/ “wireless hotspot” offering Internet access, infringes these patents, particularly because the patents cover certain aspects of the IEEE 802.11 communication protocols, a widespread standard for wireless communication.

There is some good news, however. Two major suppliers of wireless networking technology – Cisco and Motorola – have filed their own suit against Innovatio, seeking a declaratory judgment defeating Innovatio’s infringement claims. That suit was prompted by demands for indemnification made by customers of Cisco and Motorola who were sued by Innovatio earlier this year. As that suit indicates, several other leading suppliers of wireless networking equipment have taken licenses from Innovatio, including Broadcom, Agere Systems, STMicroelectronics, Qualcomm, and Intermec. Those licenses should mean that anyone who buys equipment from those suppliers is protected by the license to that supplier.

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