A jury has ordered Cisco to pay almost $66 million after deeming it infringed a patent related to audio conferencing.
Last week, a Texas federal court jury ruled that Cisco must pay video group-chat app vendor Paltalk $65.7 million for the infringement. The jury concluded that Cisco’s Webex web-conferencing products infringed on Paltalk’s patent rights around audio-server technology for teleconferencing, specifically US Patent No. 6,683,858.
The patent pertains to a “system, method, and computer program product” that enables both mixing (such as PC-based) and non-mixing (such as phone-based) clients to join a single audio conference.
Paltalk filed the lawsuit against Cisco, headquartered in San Jose, California, in the federal court in Waco, Texas, in 2021. Cisco refuted the claims, stating that the patent was invalid.
In a press release, Paltalk estimated that it would ultimately “receive no more than one-third of the gross proceeds” from the award.
The press release reads:
The exact amount of the Award proceeds to be received by the Company will be determined based on a number of factors and will reflect the deduction of significant litigation-related expenses, including legal fees. Consequently, the Company estimates that it would receive no more than one third of the gross proceeds in connection with the Award.”
As reported by Reuters, US District Judge Alan Albright denied Cisco’s request for a mistrial last Thursday. Cisco had stated that a mistrial was necessary because Albright “changed course” at the start of the trial regarding the interpretation of a critical element of the patent. Reuters highlighted that a Cisco spokesperson stated on Friday that the tech giant intends to challenge the verdict through post-trial motions and will appeal if necessary.
Meanwhile, Paltalk attorneys Max Tribble and Kalpana Srinivasan of Susman Godfrey expressed their excitement, stating they were “thrilled” with the verdict. However, despite the favourable ruling, New York-based Paltalk’s stock dropped 37 percent to $3.45 per share on Friday afternoon.
Cisco Collaboration Merges With Networking and Security, Orders Grow ‘By Double Digits’
Last month, Cisco confirmed that its Collaboration arm will merge with Networking and Security in a corporate restructuring while outlining that its Collaboration product orders grew “by double digits” in its most recent earnings call.
During the Q4 FY24 earnings call, Cisco CEO Chuck Robbins announced that the company is consolidating its Networking, Security, and Collaboration teams into a single organisation. Jeetu Patel, a seasoned Cisco executive, has taken on an expanded role as the Chief Product Officer for this newly unified business unit.
“Today, I shared that Jonathan Davidson has made the decision to step away from his current role leading Cisco Networking and will now serve as an advisor to me,” Robbins wrote in a separate blog announcement. “With this, we are bringing our Networking, Security, and Collaboration teams together as one organisation led by Jeetu Patel as he takes on an expanded role as Cisco’s EVP and Chief Product Officer.”
