Ruckus Wireless Lawsuit Reflects Litigiousness in High-Tech

Published July 1, 2008

A patent infringement lawsuit has been filed in the United States Court for the Northern District of California against NETGEAR, Inc. by Ruckus Wireless, Inc.

Ruckus alleges NETGEAR and Rayspan infringed two of its wi-fi patents (U.S. Patent Nos. 7,358,912 and 7,193,562) in the development of the RangeMax WPN 824v3 wireless router.

Ruckus seeks a permanent injunction stopping NETGEAR and Rayspan from making, using, importing, selling, or offering to sell the allegedly infringing products. In addition, Ruckus is seeking damages and reasonable royalties realized by the sale of the RangeMax product, and possibly other infringing products, plus statutory damages.

Litigious Area

Wi-fi, a highly competitive field, has been a particularly litigious area of high-tech.

Bill Kish, cofounder and chief technology officer at Ruckus, said, “Like any technology innovator, we are obligated to protect the intellectual property that makes companies like ours valuable, and the investments in making difficult innovations worthwhile.”

Ruckus, based in Sunnyvale, California, was founded in 2004. The company designs, develops, and markets industrial-strength wi-fi systems. NETGEAR, in Santa Clara, California, is a vendor of networking gear designed primarily for consumers and small- to medium-sized businesses.

Ruckus has a system for using antenna arrays to form and direct wi-fi signals over the best path at any given time. Ruckus claims the technology is unique in the industry. The company has more than 70 patents granted or pending worldwide.

Some Patents ‘Mistakes’

The effects of the current patent system on the technology market are unclear, says patent and intellectual-property expert Bruce Abramson of San Francisco, California.

“The patent system is a necessary and appropriate regulatory intervention in the free-market system,” Abramson said. “Whether the current patent system is the most effective method of achieving our regulatory objectives remains an open question, and it is impossible to judge the merits of any specific patent suit without significant factual knowledge.”

According to Abramson, some patents are, in fact, “mistakes.” He said it is difficult to know which patents have merit, hence the litigation process in cases such as Ruckus versus NETGEAR.

Former Partners, Now Competitors

Ruckus and NETGEAR entered into a technology licensing agreement in January 2005. Thereafter, Ruckus developed the underlying technology within the NETGEAR RangeMax 824v1 and v2 wireless routers, the predecessors to the RangeMax 824v.3.

The resulting hardware and software technology developed for NETGEAR was owned and patented by Ruckus Wireless.

According to NETGEAR, the RangeMax 824 has quickly become one of the fastest and best-selling products in its history. To date, NETGEAR has shipped more than 1.7 million RangeMax 824 units worldwide. Ruckus now develops, markets, and manufactures its own brand of smart wi-fi products.

Relationship Soured

NETGEAR has used Ruckus technology in two products, one of which is still shipping, according to Ruckus President and CEO Selina Lo. But it used the company’s intellectual property in the RangeMax WPN 824v3 wireless router without asking Ruckus’s permission or paying royalties, she said. NETGEAR also is not meeting Ruckus’s quality standards for the technology, Lo said.

“We feel they are damaging something we’ve built for a long time,” Lo said, adding it took the founders of Ruckus three-and-a-half years to develop the underlying technology into a product.

Ruckus is still getting royalties from the business relationship, but the firm claims NETGEAR has developed its own “smart wi-fi” technology by effectively copying the original, patented board design.

No NETGEAR personnel or representatives would comment for this article.

Tabassum Rahmani ([email protected]) writes from Freemont, California.