Cisco, others sued by intellectual-property company

Network-1 claims infringement of PoE patent

Network-1 Security Solutions, an acquirer and licensor of intellectual property, this week said it has initiated patent litigation against several data-network equipment manufacturers, including Cisco, Foundry Networks, Extreme Networks and 3Com.

The suit was filed in the U.S. District Court for the Eastern District of Texas, Tyler Division, for infringement of Patent No. 6,218,930, or the "Remote Power Patent." This patent, titled "Apparatus and Method for Remotely Powering Access Equipment Over a 10/100 Switched Ethernet Network," relates to several technologies used in equipment that complies with the IEEE 802.3af Power Over Ethernet (PoE) standard. The Remote Power Patent was granted by the U.S. Patent and Trademark Office on April 17, 2001 and expires on March 11, 2020.

Also named as defendants in the suit are Cisco's Linksys division, Enterasys Networks, Netgear and Adtran.

Network-1 seeks monetary damages based on reasonable royalties, as well as treble damages for the defendants' "continued willful infringement" of the patent.

"We have made repeated efforts, at considerable expense, to license the Remote Power Patent on reasonable terms to companies manufacturing, selling, and using equipment taking advantage of Power-over-Ethernet technology," said Corey Horowitz, Chairman and CEO of Network-1, in a statement.

"We prefer licensing the Remote Power Patent to the PoE industry without the distraction and cost of litigation, but will take whatever action is necessary to protect our intellectual property rights and maximize shareholder value," Horowitz continued. "Unfortunately, many technology companies employ a multifaceted strategy which depends on expensive litigation, delay tactics, adverse public relations, and intense lobbying in order to avoid licensing intellectual property from small companies and inventors, leaving us with no choice but to respond with litigation."

Cisco said it has received and is studying the complaint. "In the matter of patent litigation in general, cases such as this illustrate the reasons why a broad coalition of industries are asking Congress to reform many elements of the current patent system, which has created uncertainty and undue risk for true innovators," the company said in a statement.

Large technology companies are lobbying Congress to pass a patent reform bill that makes it harder for companies with no intention of creating products to buy up patents and file multimillion-dollar infringement lawsuits against other companies 3Com, Adtran, Enterasys, Extreme and Foundry declined comment. Netgear did not respond by press time.

In August 2005, Network-1 initiated patent litigation against D-Link Systems and D-Link Corp. relating to the Remote Power Patent. After two years of litigation, Network-1 and D-Link entered into a full-term license agreement covering D-Link's sale of all its PoE products at a royalty rate of 3.25% of net sales, subject to adjustment.

In addition, in November 2005, Network-1 and PowerDsine settled all outstanding litigation and entered into a settlement agreement relating to the Remote Power Patent.

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