Network-1’s Gets a Respite from District Court

Network-1 Technologies (NYSEA:NTIP) announced today that Judge Robert Schroeder III of the US District Court for the Eastern District of Texas Tyler Division issued a final judgement and deemed the company’s Remote Power Patent to be valid.

The company is engaged in developing, licensing and protecting its intellectual property and order from Judge Schroeder was for its patent litigation case against Hewlett-Packard.

As quoted in the press release:

As part of his Order, Judge Schroeder granted Network-1’s Motion for Judgment as a Matter of Law that Network-1’s Remote Power Patent is valid, thereby overturning the jury verdict of invalidity from the November 2017 trial against Hewlett-Packard. The Court also issued its findings of fact and conclusions of law that Hewlett-Packard failed to meet its burden on its inequitable conduct defense, which was the subject of a separate bench trial held in May 2018.

In its Final Judgment, the Court also denied Network-1’s Motion for a New Trial on Infringement. Network-1 intends to appeal the jury verdict of non-infringement to the United States Court of Appeals for the Federal Circuit in Washington, D.C.

In November 2017, a jury empaneled in the United States District Court for the Eastern District of Texas, found that certain claims of Network-1’s Remote Power Patent were invalid and not infringed by Hewlett-Packard (the “HP Jury Verdict”).  As a result of the HP Jury Verdict, several of the largest licensees of the Remote Power Patent, including Cisco Systems, Inc., had advised Network-1 that they would no longer pay Network-1 ongoing royalties pursuant to their license agreements.  Based on the Final Judgement, certain of Network-1’s licensees (not including Cisco), are now obligated to pay all prior unpaid royalties that accrued after the date of the HP Jury Verdict as well as future royalties through the expiration of the Remote Power Patent in March 2020.

If Network-1 successfully overturns the jury verdict of non-infringement in its appeal at the Federal Circuit, certain licensees of the Remote Power Patent, including Cisco, will be obligated to pay Network-1 ongoing royalties and all royalties that accrued but were not paid following the HP Jury Verdict. If Network-1 is unable to reverse the jury verdict of non-infringement on appeal, or there is an arbitration ruling that certain of Network-1’s licensees, including Cisco, are relieved of their obligations to pay royalties and the District Court order of non-infringement is not subsequently reversed on appeal, Network-1’s business, results of operations and cash-flow will be materially adversely effected.

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