Cisco ordered to pay $70M in civil fraud, patent case

Cisco led along a firm for six months over a potential lucrative partnership, despite already deciding to reject a deal, according to a collapsed patent licensing firm.


Networking giant Cisco has been ordered to pay $70 million in civil fraud damages to patent licensing firm XpertUniverse, after attempts at a partnership with it failed.

After just two weeks in a Delaware court, the jury also decided that the networking firm had also infringed two patents relating to the contacting of experts online for question-and-answer sessions, and ordered Cisco to pay out about $33,000 for the infringement.

In 2009, New York-based XpertUniverse sued Cisco believing that executives at the firm "strung it along" for more than six months, according to Bloomberg. Cisco had already rejected the deal internally but XpertUniverse said the firm had failed to tell it anything. This, according to the aggrieved party, could have allowed it to pursue other deals and see that the company survived.

XpertUniverse alleged "fraudulent concealment" that led to the "destruction of the company," while Cisco in the war of legal words said that the New York-based firm "never had a product, customers or revenue." Cisco's lawyer said it was "mismanagement" that led to XpertUniverse's failure, not Cisco's.

But the court found in favor of the collapsed patent licensing and intellectual property firm.

Cisco said it was "surprised and extremely disappointed" with the verdict and that it was confident that its conduct was "appropriate throughout our relationship with XpertUniverse." 

Cisco said it will "if necessary... pursue an appeal," as it believes the evidence presented during the two-week trial did not support the verdict. Cisco's share price ($CSCO) remains unaffected in pre-market trading.