Cisco Strategy for Taking on Patent Trolls: Turn the Tables with Litigation

  • Patent trolls conducted by non-practicing entities, who buy up patents to make money from licensing and lawsuits, have become increasingly common.
  • “The proportion of patent lawsuits filed by NPEs has grown to 40 percent in 2011 from 22 percent in 2007, according to Lex Machina, an intellectual-property litigation, data and analytics company,” reports the Wall Street Journal.
  • Now, networking-equipment maker Cisco is fighting back with its own litigation.
  • “Cisco’s suit against Chicago-based Innovatio IP Ventures LLC targets a tactic that some NPEs have employed in recent years,” explains the article. “Rather than allege that a big technology company has infringed one or more of their patents, Innovatio and other NPEs have gone after the tech company’s customers,” like coffee chains or hotels which don’t have the resources to fight costly lawsuits.
  • “Innovatio’s tactics, Cisco argues in its lawsuit, are ‘misleading, fraudulent and unlawful.’ It says they effectively amount to an extortion scheme, and therefore violate federal antiracketeering laws,” WSJ reports.
  • “A win by Cisco isn’t necessarily going to stop the NPE industry in its tracks,” says defense lawyer Ann Fort. “But it could halt some of the tactics used by NPEs, like going after companies’ customers.”
  • In a related case, Cisco is claiming Mosaid Technologies paid witnesses for testimony in infringement claims it filed against Cisco last year.
  • “Sometimes, lawsuits are about how much damage you can threaten in order to change behavior,” says Robin Feldman, a law professor. “At the very least, Cisco might get that. Or it could get a sympathetic judge or jury that takes Cisco’s case and runs with it.”

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