Cisco Systems Inc. (CSCO) Smacked for $70M in Patent Fraud Case

Cisco Systems Inc. (NASDAQ:CSCO) was found by a jury Friday to have fraudulently obtained technology patented by XpertUniverse, and for not securing a licensing agreement for the technology, the jury awarded $70 million in damages to XpertUniverse, plus an additional $34,000 for finding that Cisco had infringed on a couple of patents.

The lawsuit was filed in 2003 by XpertUniverse, which claimed that Cisco Systems Inc. (NASDAQ:CSCO) 2008 platform called “Expert on Demand” was based on technology developed by XpertUniverse. The two companies reportedly had a collaborative relationship until 2007, when Cisco cut off the relationship. XU claimed that Cisco had entered into a non-disclosure agreement (NDA) regarding the technology prior to the dissolution of the relationship. XpertUniverse claimed further that Cisco had violated the NDA and claimed patents on the software technology, which Cisco had agreed to distribute to match customers with experts in call centers.

“We are surprised and extremely disappointed with the jury’s verdict,” Cisco Systems Inc. (NASDAQ:CSCO) wrote in an e-mailed statement. The company has indicated it plans to appeal if U.S. District Judge Richard Andrews upheld the jury’s decision.

What do you think of the decision? How do you think this affects Cisco Systems Inc. (NASDAQ:CSCO) going forward? Let us know your thoughts in the comments section below.

DISCLOSURE: I own no positions in any stock mentioned.

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