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.


Reader Comments (rss)

(Flattened / Threaded)

  •  
    identicon
    Anonymous Coward, Sep 3rd, 2013 @ 2:46pm

    IANAL but couldn't Cisco join one of their customers via an amicus brief or something and have their lawyers help said customer file for declaratory judgment?

     

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      RonKaminsky (profile), Sep 3rd, 2013 @ 6:59pm

      Re:

      Yes, but said customer would still be liable for any kind of judgment of the court, if, for example, the court found that the case was so frivolous that it wanted to award the other side's legal fees. Not very likely in the US, but still possible.

      IANAL, but I suspect that US law disallows any kind of indemnification by a third party for such fees or other monetary liabilities.

       

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      Anonymous Coward, Sep 4th, 2013 @ 5:22am

      Re:

      A better way would be to sign a contract with one of their customers who is being sued transferring liability for that product, for that patent, to Cisco.

       

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    Todd Knarr (profile), Sep 3rd, 2013 @ 3:01pm

    Either get one of the customers to ask that Cisco be joined as a co-defendant on the grounds that they're the manufacturer of the equipment, or have one of them move to dismiss the case on the grounds that the defendant sued does not manufacture the equipment, they merely use it as intended by the manufacturer, and that any claims by the plaintiff are invalid due to patent exhaustion. Better yet, have all the defendants do this, forcing TR Labs to face Cisco's attorneys in multiple venues and potentially multiple awards of costs and fees.

     

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    Anonymous Coward, Sep 3rd, 2013 @ 3:06pm

    This makes no sense. If Cisco has no standing to sue for declaratory judgment on the grounds that Cisco isn't the one being sued, then the original lawsuits should be tossed on the grounds that it is Cisco's equipment that is supposedly infringing and therefore Cisco should be the one being sued.

     

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      Anonymous Coward, Sep 3rd, 2013 @ 7:37pm

      Re:

      Well, that would certainly satisfy common sense, but unfortunately it doesn't seem to be how patent law works, in the US.

       

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    Anonymous Coward, Sep 3rd, 2013 @ 3:07pm

    Okay am I the only one confused how the plantiff can in one situation claim that Cisco produts violate their patent then turn around and claim taht Cisco has no reason to protect themselves with a declaratory judgement?


    This is about to open a whole new can of worms for patent trolls...

     

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    Anonymous Coward, Sep 3rd, 2013 @ 3:24pm

    What about "tortious interference with contracts", which I've always wondered about?

     

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      Nothing to see here, Sep 3rd, 2013 @ 3:39pm

      Re:

      I had the same thought. If TR labs is only going after Cisco customers, they are obviously not in it for the money, or they would go after Cisco directly, so they must have a goal of forcing customers to another vendor's equipment. Right?

      What if all of cisco's customers filed a negligence suit against Cisco for making them vulnerable to the lawsuit? Could Cisco then go after TD labs?

       

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        Anonymous Coward, Sep 3rd, 2013 @ 4:12pm

        Re: Re:

        umm, not in it for the money... The documents attached say they are suing national and local telco's... yeah no money there at all.
        Probably they feel the telcos are more likely to settle than Cisco is.

         

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        Todd Knarr (profile), Sep 3rd, 2013 @ 4:33pm

        Re: Re:

        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.

         

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        loaderboy (profile), Sep 3rd, 2013 @ 4:59pm

        Re: Re:

        TD has labs?

         

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      Nothing to see here, Sep 3rd, 2013 @ 10:04pm

      Re:

      I had the same thought. If TR labs is only going after Cisco customers, they are obviously not in it for the money, or they would go after Cisco directly, so they must have a goal of forcing customers to another vendor's equipment. Right?

      What if all of cisco's customers filed a negligence suit against Cisco for making them vulnerable to the lawsuit? Could Cisco then go after TD labs?

       

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    SpaceLifeForm, Sep 3rd, 2013 @ 4:43pm

    The patents are absolute garbage, just your normal
    crap "software patents".

    Bring the NSA in. After all, they have knowledge
    of how to exploit a Cisco router.

    And then, watch the courts change their tune quickly.

     

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    Gwiz (profile), Sep 3rd, 2013 @ 5:27pm

    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.


    Did you catch that last paragraph of the article there, Blue?

    That's Mike offering up a solution to a problem he sees. He even wrote it in simple words that you can understand.

     

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      Sheogorath (profile), Sep 7th, 2013 @ 5:02am

      Re:

      That's Mike offering up a solution to a problem he sees. He even wrote it in simple words so that you can try and fail to refute it with bad examples and ad-hominem attacks as usual.
      FTFY.

       

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    D. R. Arthur, Sep 3rd, 2013 @ 5:31pm

    Cisco should just buy one of the plaintiffs

    Easiest way outside of tortious interference would be to buy a plaintiff.

     

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    Guardian, Sep 3rd, 2013 @ 6:14pm

    CSICO go get evil about it then

    go give one of the customers enough cash to do what you were.

    THEN have each customer sue them one at a time until the company goes bankrupt....

    no more patent....

     

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    6, Sep 3rd, 2013 @ 6:32pm

    you guys do know that they can file for a post grant review and/or a reexam right? It has literally never been easier to have a "bad patent" thrown out. In the history of the world so far as I'm aware.

     

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      James Burkhardt (profile), Sep 3rd, 2013 @ 11:34pm

      Re:

      Which doesn't automatically shut down lawsuits. So even if Cisco files for a reexam and its granted, Sumk A is still getting sued during the multi year review process

       

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    Steph Kennedy, IPTT, Sep 3rd, 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',

    IPTT

     

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      James Burkhardt (profile), Sep 4th, 2013 @ 8:01am

      Re: But wait...

      Which doesn't automatically shut down lawsuits. So even if Cisco files for an ex parte reexam and its granted, Shumk A is still getting sued during the multi year review process.

      As for your concerns, You are grossly oversimplifying the case, and how the ruling could/would be phrased. That ruling could easily say that when a patent holder sues or threatens to sue an end consumer rather than a 3rd "middle man" party who functions as the de facto accused infringing party, the 3rd party has clear grounds to intercede on behalf of its customers and prove its product . It provides clear guidelines indicating a very narrow subset of cases in which a non-infringer who is unlikely to fight a suit is being sued in favor of the true infringer, who would have fight the suit.

       

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    staff, Sep 4th, 2013 @ 9:48am

    more dissembling by Masnick

    'make it much easier for anyone to get bad patents thrown out'

    Invention thieves definition of 'bad patents': those we are sued over


    Masnick and his monkeys have an unreported conflict of interest-
    https://www.insightcommunity.com/cases.php?n=10&pg=1

    They sell blog filler and "insights" to major corporations including MS, HP, IBM etc. who just happen to be some of the world’s most frequent patent suit defendants. Obviously, he has failed to report his conflicts as any reputable reporter would. But then Masnick and his monkeys are not reporters. They are hacks representing themselves as legitimate journalists receiving funding from huge corporate infringers. They cannot be trusted and have no credibility. All they know about patents is they don’t have any.

    For the truth, please see...
    https://www.facebook.com/pi.ausa.5
    http://piausa.wordpress.com/

     

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    GrendelVS, Sep 4th, 2013 @ 10:59am

    It's about "having standing" to sue

    If the court allowed Cisco to sue in this case, they would have to allow the EFF and ACLU to sue on behalf of all US citizens to halt NSA spying on them. The EFF and ACLU have been told in several cases that they have to have someone who can claim they KNOW they were spied on, and be able to PROVE it, before they can file a case.

     

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    BernardoVerda (profile), Sep 4th, 2013 @ 6:01pm

    Re: It's about "having standing" to sue

    "If the court allowed Cisco to sue in this case, they would have to allow the EFF and ACLU to sue on behalf of all US citizens to halt NSA spying on them. The EFF and ACLU have been told in several cases that they have to have someone who can claim they KNOW they were spied on, and be able to PROVE it, before they can file a case."

    I voted this "funny".
    But only because it's "black humour".

     

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    CCNA Certifications, Sep 17th, 2013 @ 9:37pm

    Nice info

    • Great effort. I m looking for more. You have full command on this topic. Thank you.

     

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