IP Law Daily SRI awarded double damages and attorney fees after patent infringement victory over Cisco
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Friday, June 2, 2017

SRI awarded double damages and attorney fees after patent infringement victory over Cisco

By Robert B. Barnett Jr., J.D.

Following a $23,660,000 jury verdict in Delaware federal district court finding that Cisco willfully infringed on SRI’s computer network security patents, the court, while rejecting Cisco’s motions for new trial, judgment as a matter of law, and remittitur, granted SRI’s motions for attorney fees, doubled the damages, awarded SRI a compulsory license on post-verdict sales, and granted SRI prejudgment interest, compounded quarterly. While acknowledging that it rarely awarded attorney fees in such cases, the court chose to in this case, citing the willfulness finding and Cisco’s litigation strategies that created for SRI and the court extra work that was needlessly repetitive, irrelevant, and frivolous (SRI International, Inc. v. Cisco System, Inc., May 1, 2017, Robinson, S.).

SRI International, an independent research company, sued Cisco Systems, Inc., for the infringement of two patents: (1) U.S. Patent No. 6,711,615 ("Network surveillance") and (2) U.S. Patent No. 6,484,203 ("Hierarchical event monitoring and analysis"). The patents monitored computer networks for intruders and created suspicious-activity reports. On May 12, 2016, the jury returned a verdict finding that Cisco directly and indirectly infringed both patents in the following products and services: Cisco intrusion protection system products, Cisco remote management services, Cisco IPS services, Sourefire IPs products, and Sourcefire professional services. Finding the infringements willful, the jury awarded SRI damages of a 3.5% royalty, which totaled $23,660,000. After the verdict, Cisco moved for judgment as a matter of law, a new trial, and remittitur of the damage award. Cisco also moved to supplement the record. SRI moved for enhanced damages, including attorney’s fees.

Cisco’s motions. Cisco moved for judgment as a matter of law on every jury finding, including findings of both direct and indirect infringement on each product and service found to have infringed the patent, on both liability and damages. The court methodically addressed each claim, rejecting every motion for judgment as a matter of law. The court concluded that the evidence supported each claim and that the jury credited SRI’s expect witness over Cisco’s expert witness. Accordingly, it refused to re-weigh the evidence or re-evaluate witness credibility.

The court also rejected Cisco’s motion for new trial, finding that it was premised on the same arguments used in the motion for judgment as a matter of law. Because the jury’s verdict was not against the clear weight of the evidence, the motion for a new trial was denied. The court also denied the motion for remittitur, ruling that substantial evidence existed for the jury to reach its damage verdict.

A variety of other related motions filed by Cisco, including for an accounting, for a reapportionment of the damage award, for a new trial based on comments made in closing arguments, for a new trial based on jury instructions, and for reconsideration of the denial of its earlier motions for summary judgment were also all denied. And, finally, the court denied Cisco’s motion to supplement the record to add post-verdict activities involving re-designing its products, citing the late date, the potential factual disputes, and SRI’s opposition to the motion.

SRI’s motions. In examining whether SRI was entitled to enhanced damages, the court applauded Cisco’s aggressive defense, but noted that it "crossed the line in several regards." For example, Cisco maintained 19 defense theories up to the eve of trial, then presented only two theories at trial. And it pursued defenses that were contrary to the court’s rulings, among other activities causing significant extra work for SRI and the court. Given this behavior and the fact that the jury found willfulness, the court ordered Cisco to pay SRI’s attorney fees and costs. The court also had the discretion to award treble damages (35 U.S.C. §284). It chose to double the damages, and it awarded a 3.5% compulsory license on all post-verdict sales. Finally, it ordered pre-judgment interest at the prime rate, compounded quarterly.

The case is No. 13-1534-SLR.

Attorneys: Thomas L. Halkowski (Fish & Richardson PC) for SRI International, Inc. Jack B. Blumenfeld (Morris, Nichols, Arsht & Tunnell LLP) and Adam R. Alper (Kirkland & Ellis, LLP) for Cisco Systems, Inc.

Companies: SRI International, Inc.; Cisco Systems, Inc.

MainStory: TopStory Patent DelawareNews

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