Network-1 Security Solutions, an acquirer of intellectual property, has started patent litigation against Cisco and other data-network equipment manufacturers, including Foundry Networks, Extreme Networks and 3Com.
The suit was filed in the US 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.
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 wilful infringement" of the patent.
"We have made repeated efforts, at considerable expense, to licence the Remote Power Patent on reasonable terms to companies manufacturing, selling and using equipment taking advantage of Power-over-Ethernet (PoE) technology," said Corey Horowitz, chairman and CEO of Network-1.
"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 maximise 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.
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 S relating to the Remote Power Patent. After two years of litigation, Network-1 and D-Link entered into a full-term licence agreement covering D-Link's sale of all its PoE products at a royalty rate of 3.25% of net sales, subject to adjustment.