Spherix Inc (NASDAQ:SPEX), an intellectual property company, filed a lawsuit against computer networking giant, Cisco Systems, Inc. (NASDAQ:CSCO) for allegedly infringing on 11 patents it acquired from Nortel Networks Corporation (OTCMKTS:NRTLQ) in December last year.
According to Spherix Inc (NASDAQ:SPEX), the patent infringement accounts for the majority of the $43 billion generated by Cisco Systems, Inc. (NASDAQ:CSCO) from selling routers and switches in the United States within the last five years.
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“The company believes that the vast majority of Cisco’s switching and routing revenue from March 2008 through the present has been generated by products and services implementing technology that the company believes infringes on the 11 patents,” according to Spherix Inc (NASDAQ:SPEX).
The intellectual property company calculated that computer networking giant generated $3 billion from router and $6 billion from switching in the United States for the fiscal year ended July, 2013 alone. Over the past five years, Spherix Inc (NASDAQ:SPEX) estimated that Cisco Systems, Inc. (NASDAQ:CSCO) generated total revenue of $13 billion from router and $30 billion from switching.
Cisco inks patent cross-licensing agreements
Last month, Cisco Systems, Inc. (NASDAQ:CSCO) signed a long-term patent cross-licensing agreement with Google Inc (NASDAQ:GOOG) that covers a wide range of products and technologies to reduce the risk of future litigation. Cisco General Counsel Mark Chandler previously maintained a position not to sell patents to patent assertion entities in order to help encourage innovation rather than litigation.
On the other hand, Allen Lom deputy general counsel for patents at Google Inc (NASDAQ:GOOG) explained that the search engine giant’s agreement with Cisco Systems, Inc. (NASDAQ:CSCO) “will reduce the potential for litigation, letting us focus instead on building great new products. We’re pleased to enter into this cross-license, and we welcome discussions with any company interested in a similar arrangement.”
Cisco Systems, Inc. (NASDAQ:CSCO) also entered a 10-year patent cross-licensing agreement with Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) to access each others’ patent portfolio and to oppose patent deals of other companies engaged in “patent privateering.”
Coalition for Patent Fairness
Cisco Systems, Inc. (NASDAQ:CSCO) is part of the Coalition for Patent Fairness, an alliance seeking to reduce litigation between technology companies and devote their time and energy towards innovation. Other companies involved in the alliance include Google Inc (NASDAQ:GOOG), Adobe Systems Incorporated (NASDAQ:ADBE) and Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930), among others.