Court Says Cisco Has No Right To Sue To Invalidate A Patent That Is Being Used Against Its Customers

from the that-just-seems-wrong dept

Yet another unfortunate patent decision has come out of the appeals court for the federal circuit. This involves a case where certain customers of Cisco products were being sued for patent infringement by TR Labs, and part of its argument was that certain Cisco equipment resulted in the infringement by those customers. In response, Cisco filed a lawsuit in federal court, asking for a declaratory judgment that TR Labs' patents were invalid. TR Labs hit back that it had not sued Cisco, had no intention of suing Cisco, and thus Cisco could not sue for declaratory judgment. Unfortunately, the lower courts and now the appeals court have agreed that Cisco has no basis to bring a lawsuit, because there is no direct threat against it.

There are reasons why it makes sense to require an actual potential dispute before allowing someone to bring a declaratory judgment action, but it seems silly to argue that Cisco can't file this lawsuit. After all, its business can clearly be impacted by TR Labs' lawsuits. First, it automatically makes Cisco's offerings more expensive, in that buyers may either face increased liability or direct licensing costs just to use those products. Thus, Cisco has a direct financial stake in the outcome of those lawsuits and has a very good reason to see the patents invalidated. Unfortunately, the court just doesn't think that's enough:
In the circumstances presented here, that interest is simply insufficient to give rise to a current, justiciable case or controversy upon which federal declaratory judgment jurisdiction may be predicated
Of course, a better solution all around would be to make it much easier for anyone to get bad patents thrown out, but that's just not how our patent system works, unfortunately.
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Filed Under: patents, routers, third parties
Companies: cisco, tr labs

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  1. identicon
    Steph Kennedy, IPTT, 3 Sep 2013 @ 7:42pm

    But wait...

    "Of course, a better solution all around would be to make it much easier for anyone to get bad patents thrown out, but that's just not how our patent system works, unfortunately."

    But wait, isn't that what an ex parte re-exam request is? Couldn't Cisco have filed that instead of DJ?

    Oddly, this ruling makes perfect sense to me, given Cisco is not a party to the suit. They should be, it's their equipment, but they are not named.

    Besides which, this is exactly right:

    "I think it's tactical. Cisco has the lawyers and the intimate knowledge of their products to successfully show that either a) the products don't infringe or b) the patent is invalid due to prior art and such. For TR Labs, suing Cisco is a big risk. But the customers don't have intimate knowledge of Cisco's hardware and firmware. They're not in a position to turn up prior art, nor to show that the hardware doesn't work the way TR Labs says it does. Plus for the customers settling simply means an extra cost, another check to write, whereas for Cisco it'd damage their entire business. So the customers are more apt to settle while Cisco may see it as something they have to fight. That all makes the customers less risky to sue."

    Personally, I would not want to set the precedent that people not part of a lawsuit can come in and say whatever's being sued over isn't valid. Think of what havoc grandparents could wreak on custody battles, just for example.

    Just sayin',


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