Judge Sides With Wi-Fi Patent Troll Over Cisco

The federal case that was supposed to bring a halt to patent troll Innovatio’s ongoing shakedown of hotels, restaurants, and coffee shops took a strange turn when a federal judge threw out racketeering allegations brought by Cisco, Motorola and Netgear.

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Purveyors of public Wi-Fi networks beware. The federal case that was supposed to bring a halt to patent troll Innovatio IP Ventures LLC’s ongoing shakedown of hotels, restaurants, coffee shops and the like took a strange turn this week when a federal judge threw out racketeering allegations brought by Cisco Systems Inc., Motorola Solutions Inc. and Netgear Inc.

The racketeering case brought by the technology heavyweights was seen by many as a way to end Innovatio’s two-year campaign of questionable licensing collections brought against major hotel chains such as Hyatt Corp., Marriott Hotels, Wyndham Hotels and Resorts, Ramada Inn, Best Western, Days Inn, Super 8 Hotels, and Travelodge and later expanded to include smaller businesses like Caribou Coffee, Cosí and Panera Bread Co.

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Innovatio, which has rolled up a spate of decades-old patents left over from the portfolio of chip maker Broadcom Corp., claims pretty much anyone who uses Wi-Fi, including individuals and home users, owes them money for the use of technologies they control the rights to. According to the Patent Examiner blog, Innovatio is suing for royalties it claims each location owes for unlicensed use of wireless local area network (WLAN) technology features covered under a portfolio of 31 patents the company holds. So far, Innovatio’s focus has been on deep-pocketed clients of the major networking gear manufacturers.

According to Bloomberg News, U.S. District Judge James Holderman in Chicago on Tuesday dismissed the joint Cisco, Motorola and Netgear allegations that Innovation was engaging in racketeering by unlawfully demanding licensing fees from some of its biggest corporate customers. In a 34-page ruling on the matter, Judge Holderman said the tech vendors did not “establish that Innovatio’s licensing campaign alleging infringement of the Innovatio patents is a sham.”

The judge did, however leave the door open to further action by Cisco, Motorola and Netgear against Innovatio for breach of contract with regard to agreements the trio made with previous holders of the patents, some of which have already expired.

“Innovatio is pleased with, but not surprised by, the court’s ruling,” Matthew McAndrews, Innovatio’s lead counsel, tells Bloomberg. “Now that Cisco’s legal misdirection has hit a dead end, it will have to turn its attention to the real merits of this dispute: the defendants’ infringement of more than 350 of Innovatio’s patent claims and the appropriate measure of damages for that infringement.”

Anyone engaged in the implementation or maintenance of Wi-Fi hot spots for business clients should keep an eye on this convoluted case, which has the potential of making "free" wireless Internet access a whole lot more expensive for everyone involved.

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