Cisco fined $70 million in patent fraud case

Cisco Systems must pay $70 million in damages to patent licenser XpertUniverse for fraudulently obtaining technology developed by the New York company, a jury found on Friday, according to court filings.

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The jury also found that Cisco violated two XpertUniverse patents, and awarded an additional $34,000 in damages on those claims.

Cisco, the world’s largest manufacturer of networking equipment, said it would appeal if the judge leaves the jury verdict intact.

“We are surprised and extremely disappointed with the jury’s verdict,” Cisco said in an emailed statement after the verdict was delivered in a Delaware federal court.

XpertUniverse claimed in the lawsuit that San Jose, California-based Cisco’s “Expert on Demand” software platform was based on software that XpertUniverse developed.

XpertUniverse said Cisco violated a non-disclosure agreement it had signed and filed for patents on technology developed by XpertUniverse. It said the companies had entered a relationship in which Cisco would distribute technology XpertUniverse had developed to efficiently match customers with call center experts.

XpertUniverse said that the companies signed the non-disclosure agreement before it showed Cisco “every aspect of its intellectual property.”

Cisco approached XpertUniverse in 2004 and the companies worked together until 2007, when Cisco severed the relationship, XpertUniverse said in its lawsuit.

The next year, Cisco announced it was launching “Expert on Demand.” XpertUniverse filed its lawsuit in 2009.

In a court filing this week, Cisco told US District Judge Richard Andrews in Wilmington that “no evidence exists from which the jury could find in favour of XU on either its fraudulent concealment or patent claims.”

XpertUniverse attorney Charles Cantine of Stroock & Stroock & Lavan LLP said the company was “obviously very happy” with the verdict.

The case in US District Court, District of Delaware is XpertUniverse Inc vs Cisco Systems Inc, 09-157.

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