Cisco Blogs


Cisco Blog > The Platform

Statement on House Judiciary Committee 
Passage of Patent Reform Legislation

The House Judiciary Committee today approved patent reform legislation that helps create a level playing field for those seeking to encourage innovation. This is the second time in two weeks that a key Congressional committee voted in favor of reform. It is a clear demonstration of the bipartisan, bicameral support for reform.

Like any legislation, this bill is not perfect, but it takes a meaningful step toward reform which we support.

The committee approved a strong fee-shifting provision, and beat back efforts to weaken the measure; it includes discovery language that will help stop fishing expeditions; it provides protections against those who would use demand letters to extort cash settlements from small businesses; and it protects small inventors and universities. We’re concerned that the committee weakened the heightened pleading language, and will work to see that it is restored as the bill moves through the legislative process.

Let me thank Chairman Bob Goodlatte, Silicon Valley Congresswoman Zoe Lofgren, and Congressman Darrell Issa, whose efforts on venue reform were of critical importance, and indeed all 24 members of the committee who voted for the bill, for their tremendous leadership in supporting reform.

Tags:

Statement by Mark Chandler on Senate Judiciary Committee Passage of Patent Reform

The Senate Judiciary Committee today overwhelmingly approved patent litigation reform, clearing a hurdle which proved insurmountable in the last Congress. This is a major milestone that demonstrates strong bipartisan, bicameral support for meaningful patent reform. It clears the way for the Senate to act.

The bill approved by Committee takes a major step toward restoring fairness and balance to our patent litigation system.  It makes sure that patent assertion entities which bring objectively unreasonable lawsuits can be held to account for the costs they impose and makes sure they can’t hide behind shells to avoid that responsibility. It has meaningful discovery and heightened pleading provisions that will help avoid costly fishing expeditions; it helps stop abusive demand letters; and it includes provisions that protect the rights of universities and small inventors.

Like any bill, this legislation is not perfect. But we will work with Senators on and off the Judiciary Committee to refine the legislation as it moves to the floor, especially to assure that there continues to be an effective Inter Partes Review process to protect consumers and businesses from weak patents that should have never been granted in the first place.

Our great thanks go to Senators Chuck Grassley, Patrick Leahy, John Cornyn, Chuck Schumer, Orrin Hatch, Mike Lee and Amy Klobuchar, as well as all the members of the committee who ultimately supported the bill. This is a huge step in the right direction — one that at last opens the door to meaningful reform.

Tags:

Cisco Welcomes Introduction of Senate Patent Litigation Reform Bill

The introduction of Protecting American Talent and Entrepreneurship (PATENT) Act of 2015 represents a major milestone on the long road to patent reform. On behalf of Cisco, let me thank Senators Grassley, Leahy, Cornyn, Schumer, Lee, Hatch and Klobuchar for their work to forge bipartisan support for this legislation.

The problem of abusive patent litigation lawsuits continues to grow, costing our nation’s economy billions of dollars every year. Patent assertion entities don’t make or produce anything, instead they use abusive tactics to force settlements and drive up legal fees. This has got to stop.

The legislation introduced today is a significant step forward. It has strong fee-shifting provisions, makes important discovery reforms, and protects users of technologies from abusive demand letters.

Cisco stands ready to work with the bill sponsors and other stakeholders to make this legislation even stronger as it moves its way through the legislative process. Now is the time for Congress to pass meaningful patent reform and end the abusive business model of patent assertion entities.

Tags:

A Grammy-Class Outcome to the Rockstar Patents

Today’s definitive agreement for purchase of the Rockstar patents by a subsidiary of patent clearinghouse RPX Corporation, with simultaneous licensing of the portfolio to more than 30 technology companies, including Cisco, represents a victory for common sense. It also puts to rest a wayward and misguided business model that threatened to add costs to industry and consumers with no benefits to innovation or economic development.  This step should also send a strong message to companies who toy with the idea of “monetizing” their patent portfolios through transactions with private equity and non-practicing-entities, or by shaking down other industry participants: They will find themselves isolated. In short, they will end up as net losers if they initiate a game based on short-sighted greed.

We’re taking a different approach. Working with RPX, we devised a licensing model where even those who chose not to join with more than thirty of their peers in this purchase will still have the chance to license on comparable and fair terms.  Kent Walker, the general counsel of Google, was instrumental in pulling this together. Brad Smith and Bruce Sewell, the general counsels of Microsoft and Apple, deserve huge credit for working with the other Rockstar members – Blackberry, Ericsson and Sony – to reach a consensus that produced this positive result.

The origins of “Rockstar” are found in the smartphone patent wars that began several years ago. While we have no quarrel with companies using their patents to stop the copying of differentiating features without permission (and in fact commented favorably on the direct Apple-Samsung litigation), the driving up of patent valuations as each side in the war sought to bulk up for battle ended up serving no one other than lawyers and middlemen. Rockstar’s litigation strategy turned out to be inconclusive, keeping many lawyers very busy but with little money changing hands to date.

Read More »

Tags: , , , ,

Innovatio Case: Victory for Cisco Customers Makes the Case for Patent Reform

We’re pleased to announce today that we’ve achieved full protection for millions of Cisco customers from the overblown and specious claims of a very aggressive patent assertion entity.

Once upon a time a company called “Innovatio” set out to force retailers and small businesses to pay over two thousand dollars per location for use of WiFi patents.  They did this knowing they were obligated to license the patents under reasonable and nondiscriminatory terms and, even worse, that the majority of the businesses they were targeting were already licensed to use the patents.   Innovatio targeted over 170 million Cisco devices that Innovatio claimed could be taxed by their scheme. They sent over 14,000 letters in the first wave of an attack through which they hoped to eventually suck close to $4 billion out of the productive part of the U.S. economy by threatening innocent entrepreneurs with costly litigation.

We, together with Netgear and Motorola, intervened on behalf of our customers and accused Innovatio of running a racket, and we demanded a trial on the true value of those patents.  We also demanded damages for the breach of the contractual obligations to license standard-essential patents on fair terms.  Although Chief Judge Holderman in the Northern District of Illinois did not allow the racketeering claim to move forward, he determined that the patents had a collective value of approximately 10 cents per WiFi device.  “Innovatio” later admitted that over 100 million of the devices they targeted were already licensed, and taking into account our strong breach of contract and other claims, they agreed to license the remaining 85 million devices for a total of $2.7M, or less than 3.2 cents apiece.

Read More »

Tags: , , , ,