Buffalo Technology Can Sell Again in U.S.�For Now
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Buffalo Technology, which has been embroiled in ongoing U.S. patent litigation with the Australian organization Commonwealth Scientific Research and Industrial Organization (CSIRO) over its Wi-Fi products, got a break Wednesday when a federal judge stayed the permanent injunction that had been preventing the wired and wireless networking, storage, and memory solutions vendor from selling, using, importing, or manufacturing its IEEE 802.11a- and 802.11g-standard-compliant products in the U.S.
CSIRO originally sued Buffalo Inc. and its US affiliate Buffalo Technology (USA) Inc. in 2006, alleging that Buffalos products infringed its U.S. Patent 5,487,069, which was filed in 1993 and concerns Wi-Fi technology relating to the transmission and modulation of wireless signals.
In June of 2007, after the U.S. District Court for the Eastern District of Texas held that Buffalos products did, in fact, infringe certain claims of the patent and that those claims were valid, the Court ordered Buffalo to stop selling its (allegedly) infringing products in the U.S. immediately.
Buffalo appealed that order to the U.S. Court of Appeals for the Federal Circuit.
On September 19, 2008, the Federal Circuit remanded the case back to the district court, raising the issue of whether the CSIRO patent is, in fact, valid. To be certain that by vacating the decision on validity the injunction was also lifted, Buffalos legal team, led by Dick Kelly, asked the trial court to stay the injunction to the extent that it was still in force.
We werent sure that [vacating the decision on validity] necessarily lifted the stay, so we went back to Judge Davis, and heand everyone, including CSIRO--agreed, said Kelly. We did not want the possibility of being accused of violating an injunction and being held in contempt of court. Its better to be safe than sorry. Weve got the blessing of the court and were now off to the races.
The order staying the permanent injunction means that Buffalo is free to sell IEEE 802.11a, 802.11g, and 802.11n-compliant products in the United States until a new decision is rendered.
As of 3pm EST Thursday, customers could not yet purchase products via the Buffalo Web site. Visitors to the product pages for Buffalos Wi-Fi-related devices received only the outdated news that the injunction was still in place as of September 19, 2008. Representatives from Buffalo did not respond to inquiries by press time, but Kelly said he was surprised that the product pages were not yet active. He speculated that the likely cause was that the company has no inventory.
They could not have any imports, said Kelly. They couldnt bring in any material, so that they have to basically bring them in now, appropriately boxed and labeled for the US. Thats likely the delay here. I would suspect that theyll have the Web site up selling as soon as possible.
The next step in the case is a status conference to be held in Texas on December 16th, at which time Judge Daviswho has presided over the case from the beginningwill determine whether the other suits being brought by CSIRO against a long list of defendants, including Intel, Marvel, Belkin, Cisco, and Netgear will be consolidated.
The best case scenario, said Kelly, is that the patent is invalidated. Buffalos legal team contends that prior art dating back to 1991 invalidates CSIROs 1993 patent, which applies only to IEEE 802.11 a, g, and nnot 802.11b. I have no idea why, said Kelly. But weve been able to supply b products to some OEMs.
The worst case scenario for Buffalo is that the patent holds up in District Court. Then we have no other defenses, said Kelly. We would then appeal.
If the CSIRO patent is not invalidated, the terms of the settlement are likely to be large, said Kelly. They want past damages, based on sales to date. They would then also want a running royalty going forward, whether they would entertain a lump sum payment, we dont know. The parties couldif theres a separate trial on validity and everybody loseswe could sit down and settle or go to trial [to determine damages].
Some of the defendants in the various CSIRO suits have a trial date set for April.
In a statement issued at its Web site Wednesday night, Buffalo said it, expects that the trial court will, in the near future, schedule a trial on whether CSIROs asserted patent claims are invalid and is confident that a jury will vindicate its position.
CSIRO made no public comment today and could not be reached for comment by press time.
- For related Wi-Fi Planet coverage, read "Buffalo Injunction May Prevent Sales," "Tzero Sued over Patent," and "September Newsbits."
Naomi Graychase is Managing Editor at Wi-Fi Planet.