updated 10:57 pm EST, Thu February 6, 2014
Patent troll sued end users of networking gear, settlement prevents further action
Networking hardware manufacturer Cisco has struck a deal with non-practicing entity Innovatio IP Ventures to settle a suit and protect commercial and potentially home users of its hardware. Together with Netgear and Motorola, have agreed to pay IP Ventures 3.2 cents for 85 million pieces of network gear, netting the patent troll $2.7 million.
Innovatio IP Ventures began suing coffee shops, grocery stores, restaurants and hotels for allegedly infringing upon patents in its owned portfolios. The company's strategy was to prey on franchises rather than parent companies, and offer the option of settling for between $2,300 and $5,000.
At the time of filing, the legal team handling the suits implied the patents covered everyone who has a home Wi-Fi setup. Motorola and Cisco took Innovatio IP to court, seeking a declaratory judgment that its Wi-Fi products do not infringe upon Innovatio's patents.
Cisco General Counsel Mark Chandler said of the deal that the company "spent $13 million on this litigation, not including the $2.7 million settlement. I'm proud that we stepped up for our customers and appreciate the great job that our counsel at Kirkland and Ellis did for us. But that expenditure would not have been necessary if Innovatio had met its obligations to license on reasonable and non-discriminatory terms, and had come to Cisco seeking a reasonable license first rather than targeting our customers and those of other manufacturers."
Chandler went on to criticize the state of the US patent laws. In short, the executive believes that there should be "provisions requiring those who target innocent third-party users of products to register their claims at the FTC" as well as potentially be on the hook for legal fees of the accused if the case is lost.