Like Alan Ladd in the classic western "Shane", John Chambers the CEO of Cisco has had enough of being bullied, threatened and pushed around. In the movie, Shane puts a couple of .45 slugs into the villain Ryker (played by the great Jack Palance). In the corporate America of 2012, the modern Cisco Kid is using legislation, and his company's long pockets, to curb the extortionate antics of "patent infringement" trolls. It is to be hoped the end effect will be the same. Martyn Warwick reports.
Here at TelecomTV, in video and in print and all under the generic heading of "Patently Absurd", we have long railed and fulminated against opportunistic companies that distort and traduce the comms industry by snapping up patents in bulk and (usually) at minimal cost and then use those purchases to sue other, often, but by no means always, wealthy and established companies for patent and copyright infringement - even though the companies bringing or threatening legal action are not themselves capable of making anything.
These exploitative organisations go under the umbrella title of "Non-Practicing Entities" (or NPEs) but that is far too polite a description - which is why the are better known to all and sundry as "Patent Trolls"
In 2007 the proportion of patent lawsuits being filed by NPEs was already unacceptably high at 22 per cent, but by last year this figure had hit a massive 40 per cent and a further rise is expected when this year's figures are finally published.
In the main, companies faced with expensive patents lawsuits have tended to roll-over and pay-up to the trolls with few victims being brave enough aggressively to defend themselves in court - until today. Now Cisco Systems is fighting back and has filed lawsuits against Innovatio IP Ventures, LLC, and Mosaid Technologies Inc for, and you just have to love this in the town of Al Capone, "extortion and racketeering".
It's heavy stuff and Innovatio IP Ventures LLC of Chicago and Mosaid Technologies of Ottawa might yet live to rue the day they provoked Cisco into retaliatory action. You see, other than simply filing patent lawsuits against manufacturers in the expectation of speedy and lucrative out-of-court settlements, another NPE money-making tactic is to threaten legal action against small customers who have bought and are using a manufacturer's technology and equipment.
Now a righteously vengeful and tooled-up posse is coalescing around Cisco and the company has been joined in its anti-troll activities by co-plaintiffs Netgear and Motorola Solutions. They jointly claim that Innovatio IP Venures sent 8,000 "threatening letters" to Cisco, Netgear and Motorola customers such as small coffee shop chains, boutique hotels and various retail outlets demanding immediate royalty payments for the use of Wi-Fi equipment containing items for which Innovatio asserts it holds patent rights.
Many of these small concerns are so worried about the disruption and costs that could accrue if they fight against such allegations that they simply pay up. For NPEs it has been a very low risk, low cost, high returns strategy. But then its always easy to pick on someone smaller and weaker then yourself - until big brother and his pals turn up.
Cisco has had enough - as the company's General Counsel, Mark Chandler made extremely explicit. In the plainest of unvarnished terms he told the Wall Street Journal, "When someone runs a racket, we're going to make them liable for racketeering."
Thus Cisco et al accuse Innovatio of "fraud, deceit, misrepresentation, and other forms of unfair and unlawful conduct", that are in breach of US federal anti-racketeering laws. Mosaid is accused of "paying witnesses for testimony and documents"... "to overcome fatal shortcomings in patent-infringement claims.” Big guns are being brought to bear and a bloody shootout is in the offing.
For its part Innovatio "categorically denies" the allegations leveled against it by Cisco, Netgear and Motorola Solutions. In a couple of days time Judge Holderman of the Northern District of Illinois will decide if the 'racketeering' allegations have merit and whether or not the case will go forward to trial.
Either way, there's a change in the wind. If the case is found to have merit, Innovatio will be up against some powerful adversaries who will doubtless seek massively punitive damages. And, if the case doesn't make it to trial shaken NPEs are unlikely to risk repeating such allegedly "threatening" behaviour again. There are plenty of other jurisdictions for plently of other court cases.
If you are interested in taking a look, the case is filed as "In Re Innovatio IP Ventures LLC Patent Litigation, 11-cv-9308" in the US District Court, Northern District of Illinois (Chicago).
And by the way, The Cisco Kid children's TV series ran in the States between 1950 and 1956 and John Chambers was born in August 1949 so he could have been a young fan. The Cisco Kid TV series is famous for two things; being the first ever to be filmed in colour - and its bad jokes. Here's an example:
Cisco: "You just have to learn it the hard way, that every man is your brother".
Pancho: (Cisco's dumb but loyal and brave sidekick) "No Cisco, I know somebody who is not my brother".
Pancho: "My sister"
Boom! Boom! They just don't write 'em like that any more. Fortunately
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