Cisco Told to Pay $63.8 Million in Commil Patent Verdict

Cisco Systems Inc. (CSCO), the biggest maker of networking equipment, was told by a federal jury to pay $63.8 million to a Texas company for infringing a patent on wireless-transmission technology.

The April 8 verdict against Cisco was won by closely held Commil USA LLC of The Woodlands, Texas. The jury in Marshall, Texas, rejected Cisco’s arguments that it wasn’t infringing the patent, and set the $63.8 million as a reasonable royalty for use of the Commil technology.

This is the second trial in the case. Cisco had lost at trial in May, and the jury awarded $3.7 million. Magistrate Charles Everingham, who presided over both trials, threw out the verdict, saying Cisco’s lawyers made inappropriate religious comments before the jury.

“We know this new award more truly reflects our client’s significant damages as a result of Cisco’s infringement,” said Commil lawyer Richard Sayles of Dallas-based Sayles Werbner. “This verdict further validates Commil’s valuable patented technology.”

The patent, issued in 2002, covers a way of maintaining network connections through a series of base stations so a person with a laptop computer, mobile phone or device with a wireless-transmission feature such as Bluetooth doesn’t lose the signal while walking through a building.

“There are nine years left on the patent,” Commil lawyer Mark Werbner said after the verdict was announced. “We expect Cisco to respect this verdict. Failing that, we will ask the court for appropriate relief.”

‘Grounds for Appeal’

San Jose, California-based Cisco, which reported $10.4 billion in sales during the fiscal quarter ended Jan. 29, pledged to appeal the verdict.

“We are disappointed by the jury’s verdict, but following the two trials in this matter, Cisco has unusually strong grounds for appeal, and we look forward to pursuing them immediately,” the company said in an e-mail.

The case is Commil USA LLC v. Cisco Systems Inc., 07cv341, U.S. District Court for the Eastern District of Texas (Marshall).

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net

To contact the editor responsible for this story: Allan Holmes at aholmes25@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.