District Court puts a royalty value on standards essential patents for wireless technology


U.S. District Judge James Holderman in Chicago was asked to determine the royalty damages in Cisco Systems v. Innovatio IP before deciding on patent validity or if infringement occurred. Presumably this would allow the parties to value the merits of proceeding with the two-year-old case.

On October 3, Judge Holderman set 9.56 cents per chip as the value of the contested, standards essential patents used in wireless computer network technology, as we narrow in even further on what the courts deem to be reasonable and non-discriminatory, or RAND, terms.

Innovatio is the other nonpracticing entity everyone likes to point to (IP Ventures being the first) when they describe abuses in the U.S. patent system. They own patents in wireless technology, and their monetization strategy has been to threaten litigation against small business users that benefit from that technology (often setting such cases for $2,500 and up) rather than go after large manufacturers who incorporate that technology into their products. Any commercial entity using a wireless router was vulnerable. Cisco Systems, Netgear, and other manufacturers of wireless equipment have gone to court to protect their clients from these nuisance lawsuits.

According to Businessweek, an Innovatio spokesperson said the company will be making an offer to license their technology at these rates to manufacturers.


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