[Interview file] The amount of compensation for the patent is 3,7 trillion won... 'Blockbuster's Dream' IP Era

While interest in IP (Intellectual Property) is rising due to a lawsuit for infringement of trade secrets related to electric vehicle batteries by LG Chem and SK Innovation, in the United States, a global network equipment company, Cisco Systems, has been ruled for damages on an astronomical scale. This is the topic.

Judge Henry Morgan of the Norfolk District Court in Virginia, USA, told Cisco in a patent infringement lawsuit filed against Cisco by Centripetal Networks Inc. on the 5th. The decision was made to compensate for the standard of KRW 2.18 trillion.

Judge Morgan estimated that the damage inflicted by the centrist due to Sysk's patent infringement was $755.8 million, but determined that Cisco's patent infringement was willful and egregious, and the amount of compensation was calculated as It increased to $1.9 billion, which is 2.5 times.

In addition, Judge Morgan ruled that 10% of sales of patent infringement-related products over the next three years and 5% of sales over the next three years should be paid as royalties.

IAM Media, a media outlet specializing in patents, estimates that the royalties calculated in this way will be from $167.7 million to $300 million annually for the first three years, and from $83.8 million to $150 million annually for the next three years. .

The amount of damages judgment amounted to $1.9 billion and the royalties received for six years amounted to $1.35 billion, and the amount of damages Cisco owed for patent infringement was up to $3.25 billion (KRW 3.74 trillion). It can be reached.

The $1.9 billion in patent infringement judgment against Cisco was the largest patent infringement judgment in US history, IAM Media reported.

The previous largest patent indemnity was a $1.5 billion indemnity ruling that Lucent filed against Microsoft in 2007 over MP3 technology.

Judge Morgan did not order Cisco to halt the sale of infringing products.

Judge Morgan said in the ruling, "A suspension of patent infringement products could have unintended and devastating damage to Cisco's customers, defense, and the safety of the global Internet."

This is a testament to the fact that Cisco dominates the global network equipment market.

The trial was held alone by Judge Morgan without a jury verdict.

The jury's verdict was not adopted for fear of corona 19 infection, and the trial over several months was also conducted with images through the Zoom system.

Centripetal Networks, based in Herndon, Virginia, said, "After developing a network security system with the support of the US Department of Homeland Security, we met with Cisco and gave technical explanations, and Cisco arbitrarily incorporated our invention into the network." Revealed.

Judge Morgan said, "It can't be a coincidence that Cisco launched a product that included Centripetal's related functions within a year after meeting with Centripetal."

Cisco said, "Since Cisco's innovative product is several years ahead of the Centripetal patent, the patent is invalid and there is no patent infringement. I am disappointed that the ruling came out even though I presented evidence that it did not infringe. CAFC)," he said.

"Our sales were doubling every year until we met with Cisco in 2015 to negotiate an alliance. After we told Cisco about our invention in 2016, Cisco officials kept coming and asking for more information. "This ruling is an important victory for small and innovative companies."

Cisco announced the'Encrypted Traffic Analytics' in 2017.

David Goeckeler, then head of network security, said, "This technology solved a network security problem that seemed impossible."

Cisco also filed an objection against Judge Morgan's wife, claiming that Cisco stocks were held, but Judge Morgan said that the decision had not been written before he learned that his wife had bought Cisco stock at the request of a broker, but had already concluded the trial Cisco did not accept the challenge.

Although the sentry received an astronomical judgment in the first trial, it would have to go through a long and difficult process only to receive a reparation, which is expected to reach $3.25 billion.

As Cisco announced its intention to appeal, it must win the court of appeals in the Federal Court of Appeals (CAFC), and also win the patent unvoted lawsuit in the United States Patent Tribunal (PTAB), which Cisco is expected to bring.

In this process, the amount of compensation may be greatly reduced.

However, this astronomical patent compensation ruling against Cisco is interpreted as having a great implication for future patent infringement lawsuits, as a more stringent ruling on patent infringement has been recently made in US courts and the amount of compensation judgment has been greatly expanded.

As reported by IAM Media, citing ``Lex Machina'' of LexisNexis, a global patent database analysis company, 9 cases of patent infringement compensation made this year amounted to more than 100 million dollars.

Patent infringement rulings worth more than $100 million increased from two in 2017 and one in 2018 to four in 2019, followed by nine this year, more than doubled from last year.

There are still various procedures left to finally receive compensation for patent infringement, but the fact that 9 cases of patent compensation judgments worth more than $100 million (our money, KRW 115.2 billion) this year alone is favorable for patent holders. It is interpreted as being adjusted.

"Without patent protection, startups won't be able to survive the big fights with big companies," said Steven Rogers, Centripetal's Chief Executive Officer, who won a patent infringement lawsuit against Cisco.

It is known that LG Chem, which received an early victory ruling from the US International Trade Commission (ITC) in a lawsuit against SK Innovation infringement of trade secrets related to automobile batteries, is demanding compensation over 1 trillion won.

KAIST, who filed a lawsuit against Samsung Electronics for infringing semiconductor-related patents, was ruled in compensation of $233 million in a US court in February and concluded the agreement with Samsung Electronics.

As technology becomes more and more important, the amount of compensation for patent infringement is also increasing.

However, in Korea, the amount of patent compensation judgment is ridiculously small, and it is pointed out that the patent court is an inclined playground for large corporations, so that no example can be found in the case of a SME's final victory in a patent lawsuit against a large corporation.

The 21st century is said to be the era of intellectual property (IP), which collectively refers to patents, designs, and copyrights.

The thorough protection of intellectual property, the product of individual creativity and effort, could be one of the secrets to invigorate our society where the ladder between the classes that can move to a better class is broken and the dynamics are weak. .