Network 1 Security Solutions Incorporated commenced litigation against Cisco Systems, Linksys, Foundry Networks, Extreme Networks, 3Com Corporation, Enterasys Networks, Netgear and adtran. Network 1 claims that the companies infringed upon their remote power patent and patents pertaining to their power over Ethernet technologies.
The litigation has been filed in the United States District Court for the Eastern District of Texas, Tyler Division, for infringement of United States Patent No. 6,218,930 (the “Remote Power Patent”). Network 1 seeks monetary damages based upon reasonable royalties as well as treble damages for the Defendants’ continued willful infringement of the 6,218,930 Patent.
Unfortunately for the long list of data networking companies, Network 1 has already set a precedent by suing D-Link Corp. in the same court and receiving a favorable ruling in the Markman Hearing where the Court agreed with Network 1 on the constructions of 5 of the 6 claim terms at issue.
Their previous lawsuit and victory cost D-Link Corp. a one time, an upfront fee of $100,000 and monthly royalty payments of 3.25% on sales of all D-Link’s Power over Ethernet products. This settlement will hold until March 11, 2020, when Network 1’s twenty year patent expires. The royalties from D-Link Corp for the three months ended September 30, 2007 totaled more than $180,000, which is the only revenue the company recorded in 2007.
A victory against any of the aforementioned data networking giants would be a financial lift for Network 1 and its shareholders. A guilty verdict would secure additional streams of income for the company for the next 17 years, in addition to any one time fees for damages that will be bestowed to the company.
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