Andre Yoskowitz
9 Feb 2014 15:11
Infamous patent troll Innovatio IP Ventures has settled with Cisco over hundreds of million of routers used by the average retail business.
The trolls bought old Broadcom patents and last year sent 13,000 letters to chain hotels and even coffee shops, demanding up to $5000 in licensing fees for the use of Wi-Fi routers and other access points. None of the companies paid and Innovatio filed lawsuits.
Not willing to see their end users abused, Cisco, Netgear and Motorola all intervened in the lawsuits, getting Innovatio to reduce their demands from $5000 per business to $5 per router. Cisco did not relent and got the final settlement down to 3.2 cents per router. Cisco General Counsel Mark Chandler says the company will pay $2.7 million, 3.2 cents each for 85 million unlicensed devices. Cisco had already struck licensing deals for its other 100 million active routers. Innovatio can no longer attack Cisco router users.
"We spent $13 million on this litigation, not including the $2.7 million settlement," wrote Chandler. "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 had always said the company's fight against Innovatio was a personal one: "For me, this was always a matter of protecting my customers against being ripped off. This is really outrageous conduct to try to rip off a bunch of innocent small businesses. Nothing will make me as a general counsel more angry than someone trying to abuse my customers."
Motorola and SonicWALL reached separate but similar settlements with the troll in December, and Netgear and HP are expected to do similar deals in the near future, as well.
If there was ever a case that shows the need for serious patent reform in the U.S., it is this one.