A major U.S. router brand could be banned from operating in much of Europe due to patent litigation.
The current situation of Netgear is not favorable.
Huawei has achieved a series of legal victories in its patent disputes with Netgear, focusing on the essential technology for WiFi 6 used in Netgear's wireless routers. This brand is known for its popular products, such as the Nighthawk and Orbi series. Recently, an important development has been revealed that could have a significant impact on Netgear's operations in Europe.
The Unified Patent Court (UPC) of Europe has granted Huawei a multi-country injunction against Netgear, following a decision by the Munich Local Court. This ruling pertains to a standard essential patent (SEP) for WiFi 6 and affects seven nations, including Germany, France, and Italy. This ruling is considered one of the most significant judgments in the history of the UPC regarding patents essential to standards.
The situation is becoming complicated for Netgear, which is facing Huawei's claims and now has to decide among various difficult options. A new ruling from the Munich Regional Court I, scheduled for January 9, 2025, could further exacerbate the situation. In this case, Huawei aims to demonstrate the validity of another WiFi 6 SEP, which is likely to be considered infringed according to legal discussions.
Netgear's defenses are based on arguments regarding FRAND licensing obligations, which are fair, reasonable, and non-discriminatory, as well as on the doctrine of patent exhaustion. However, it is noted that the court has historically shown skepticism towards these defenses unless they are backed by solid evidence. In particular, patent exhaustion, which Netgear hoped would protect devices using Qualcomm chips, has limited applicability. The new UPC decision indicates that this defense can only apply if Qualcomm chips were first sold within the European Union, presenting logistical and manufacturing challenges for Netgear.
The consequences of this ruling not only affect Netgear, but also reinforce the UPC's stance on standard essential patents and FRAND obligations. The court has emphasized that implementers must engage constructively in licensing negotiations and, in certain cases, accept collective licensing offers. Netgear's refusal to accept a collective license, along with its litigation strategies, has weakened its position.
With the imminent enforcement of the injunction, it is mentioned that Netgear faces a difficult choice: negotiate a license or risk more legal and operational difficulties. This case not only highlights the complexities of enforcing SEPs in Europe but also sets a precedent for similar disputes in the future.