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Cisco gets a big patent win despite US Supreme Court loss, overturns $64 Million verdict

Cisco calls the seven-year litigation initiated by a patent troll a “travesty.”

From left: Mark Werbner,   a partner in Dallas' Sayles Werbner,   with client and Commil owner Jonathan David


Cisco has finally quashed a long-running lawsuit brought by an Israeli patent-holding company called Commil USA. The case took a surprising number of detours, including a trip to the Supreme Court last year that looks almost unnecessary in hindsight.

In an opinion (PDF) published Monday, the US Court of Appeals for the Federal Circuit said that Cisco’s non-infringement argument should have won the day at trial, and there was no justification for a jury’s $64 million (£43 million) verdict against the networking giant. The opinion overturns the verdict, leaving Commil with nothing to show for a case it has pursued since 2007.

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Monday’s decision puts the Federal Circuit in an awkward position, because they had already considered the case before in 2013. At that time,  the three-judge panel chose to punt on the non-infringement argument, simply not ruling on it—yet now the same panel views it as a decisive point in Cisco’s favor.

In 2013, a two-judge majority on the panel found that Cisco should have been allowed to tell the jury they had a “good faith belief” that the patent was invalid. The jury instructions were thus improper, and the appeals judges kicked the case back down to the trial court in the Eastern District of Texas.

Or rather, they tried to return it. Commil slammed the idea of a “good faith belief” defense and took its case to the Supreme Court, which sided with Commil in a 6-2 ruling.

Although a Supreme Court ruling always has the benefit of clearing up precedent for future cases,  the whole issue of a “good faith belief” now looks like a bit of a sideshow. The Federal Circuit has ruled in favor of Cisco on a non-infringement basis, a ruling they could have clearly applied in 2013.

Commil had argued that its patent, numbered 6, 430, 395, solves the problem of “how to manage ‘hand-offs’ between different base stations that together provide wireless coverage over a large area.” Rather than using old base stations, the invention “provides a novel architecture that includes a new hardware device called a switch, ” Commil lawyers explained in court documents.

But the appeals court found that the jury couldn’t have reasonably found that Cisco’s accused “Split-MAC” product infringed. The patent describes two key steps, a “dividing” step and a “running” step. The running step is shorthand for this fragment of a patent claim:

for each connection of a mobile unit with a Base Station, running an instance of the low-level protocol at the Base Station connected with the mobile unit and running an instance of the high-level protocol at the Switch.

“Cisco contends that this step is never performed when its system is used, because its system employs a single copy of the protocol to support all the connected devices, ” writes US Chief Circuit Judge Sharon Prost for a unanimous panel. “We agree with Cisco.”

Commil originally filed its case against Cisco in 2007 in the patent hotspot of Marshall, Texas. After an initial jury trial, Commil won its case but got an award of $3.7 million (£2.5 million), far less than it was seeking. After trial, Commil filed a motion arguing that it should get a new trial because of statements made by a Cisco lawyer that “used religious references and played on stereotypes about Commil’s owner and inventors, who are Jewish and reside in Israel.”

US Magistrate Judge Charles Everingham agreed (PDF), ruling that the lawyer was trying to align “his religious preference with those of the jurors and employ an ‘us v. them’ mentality—i.e., ‘we are Christian and they are Jewish.'” He ordered a new trial,  which led to a damage award against Cisco of $63.8 million (£43 million).

An attorney for Commil USA didn’t respond to a request for comment.

“We are gratified that this unwarranted seven year saga has been brought to a close, ” a Cisco spokesperson told Ars via e-mail. “The patent never had anything to do with our products and the millions of dollars spent defending this unmeritorious suit are a travesty.”

This post originated on Ars Technica,  by Joe Mullin





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