Cisco will pay $112 million for a patent dispute

The Network-1 Security Solutions company specializing in acquisition and management of intellectual property stated that Cisco and five other companies violated the patent for Power-over-Ethernet technology.

Proceedings in this respect were initiated in February, 2008 when the Network-1 Linksys and also Foundry Networks companies (now Brocade), Extreme Networks, Enterasys, 3Com (now as a part of HP submitted the corresponding claim against Cisco and its division), Adtran and Netgear. The Network-1 supported the statement with the patent of the USA behind number 6,218,930.

Hearing of the case was conducted by district court of the USA of east District of State of Texas, division in the city of Tayler. As settlement of a situation the injured party demanded payment in the amount of $32 million once and $80 million more within the next nine years specifically from Cisco. That kasayetsyaadtran, Enterasys, Extreme and Foundry, they also agreed to join and redeem not exclusive licenses on technology, the patent for which the Network-1 owns.

Under the terms of the license, the companies will pay the Network-1 prepayment in total equal to $32 million and also will redeem licenses for a product for all validity period of the patent expiring in March, 2020.

Besides, Cisco agreed to royalty payment since 2011za sales of products of the line of Power-over-Ethernet up to a maximum amount in $8 million in 2015 and also $9 million a year after this date up to the end of action of the patent. The final amounts can vary, said in the statement of the Network-1.

Representatives of Cisco refused to comment on a situation. The agreement signed with 3Com assumes the dispute resolution without any payments. This condition does not extend to HP parent company and the product line of Power-over-Ethernet belonging to it: the solution of a question with this party of the conflict will proceed in the Texas district court.

The Network-1 possesses only six patents for different telecommunication technologies and network products. The patent because of which there was a conflict (Remote Power Patent) was issued by Patent chamber of the USA on April 17, 2001 and expires on March 7, 2020. Netgear is not made responsible as the company began activity in this direction before patent grant and at present is a licensee of the Network-1.