Case 2:22-cv-08050-CJC-JDE Document 23-1 Filed 04/18/23 Page 1 of 53 Page ID #:122
`
`Gregory Dovel (SBN 135387)
`email: greg@dovel.com
`Richard Lyon (SBN 229288)
`email: rick@dovel.com
`DOVEL & LUNER, LLP
`201 Santa Monica Blvd., Suite 600
`Santa Monica, CA 90401
`Tel: 310-656-7066
`
`Attorneys for Plaintiff
`Network-1 Technologies, Inc.
`
`
`UNITED STATES DISTRICT COURT
`
`FOR THE CENTRAL DISTRICT OF CALIFORNIA
`
`LOS ANGELES
`
`
`
`NETWORK-1 TECHNOLOGIES, INC.,
`
` Plaintiff,
`
`vs.
`
`HIKVISION USA, INC.,
`
` Defendant.
`
`
`CASE NO. 2:22-cv-08050
`
`Amended Complaint for Patent
`Infringement
`(U.S. Patent Nos. 6,218,930).
`
`JURY TRIAL DEMANDED
`
`
`
`
`
`
`
`
`
`
`
`AMENDED COMPLAINT FOR PATENT INFRINGEMENT
`
`Plaintiff Network-1 Technologies, Inc. (“Network-1”) sues Hikvision USA
`
`Inc. (“Hikvision”) and, on information and belief, alleges as follows:
`
`
`
`
`1
`
`

`

`Case 2:22-cv-08050-CJC-JDE Document 23-1 Filed 04/18/23 Page 2 of 53 Page ID #:123
`
`INTRODUCTION
`
`
`
`1.
`
`Plaintiff Network-1 owns the invention described and claimed in
`
`United States Patent No. 6,218,930 entitled “Apparatus and method for remotely
`
`powering access equipment over a 10/100 switched ethernet network” (the “‘930
`
`Patent”).
`
`2.
`
`Defendant, without Plaintiff’s permission,
`
`(a) used Plaintiff’s patented technology in connection with products that
`
`it made, used, sold, and offered to sell which distributed or used
`
`power transferred through Ethernet cables (“Power over Ethernet” or
`
`“PoE”), including Power Sourcing Equipment (“PSEs”) and Powered
`
`Devices (“PDs”) that are compliant with the IEEE 802.3af and 802.3at
`
`standards, and
`
`(b)
`
`contributed to or induced others, including Defendant’s customers
`
`who purchase Power over Ethernet products from Defendant, to
`
`infringe the method claims of the ‘930 Patent.
`
`Plaintiff Network-1 seeks damages for patent infringements of the method claims
`
`of the ‘930 Patent.
`
`THE PARTIES
`
`
`
`3.
`
`Plaintiff Network-1 Technologies, Inc. is a Delaware corporation,
`
`with its principal place of business in New Canaan, Connecticut.
`
`
`
`2
`
`

`

`Case 2:22-cv-08050-CJC-JDE Document 23-1 Filed 04/18/23 Page 3 of 53 Page ID #:124
`
`4. Upon information and belief, Defendant Hikvision USA Inc. is a
`
`California corporation organized and existing with its principal place of business in
`
`City of Industry, California.
`
`JURISDITION AND VENUE
`
`
`
`5.
`
`This is an action for patent infringement arising under the patent laws
`
`of the United States, 35 U.S.C. §§ 271 and 281, et seq.
`
`6.
`
`The Court has original jurisdiction over this patent infringement
`
`action under 28 U.S.C. §§ 1331 and 1338(a).
`
`7.
`
`Venue is proper in this District under 28 U.S.C. §§ 1391(b) and (c),
`
`and 1400(b) because Defendant is incorporated under the laws of the State of
`
`California, Defendant does business in this District in California, Defendant is
`
`responsible for acts of infringement in this District in California, and Defendant
`
`delivered or caused to be delivered products that infringed in this District in
`
`California.
`
`THE ‘930 PATENT
`
`
`
`8.
`
`The United States Patent and Trademark Office issued the ‘930 Patent
`
`on April 17, 2001. A copy of the ‘930 Patent is attached as Exhibit 1.
`
`9.
`
`Through assignment, Plaintiff Network-1 is the owner of all right,
`
`title, and interest in the ‘930 Patent, including all rights for damages for past
`
`infringements.
`
`
`
`3
`
`

`

`Case 2:22-cv-08050-CJC-JDE Document 23-1 Filed 04/18/23 Page 4 of 53 Page ID #:125
`
`10. The validity of the ‘930 Patent has been confirmed in multiple
`
`proceedings in multiple forums.
`
`11. Five parties accused of infringing the ‘930 Patent (all of them have
`
`since licensed the ‘930 Patent) filed five Inter Partes Reviews and one Covered
`
`Business Method Review challenging the validity of the ‘930 Patent. The Patent
`
`Trial and Appeal Board issued a final written decision, holding that none of the
`
`challenged claims of the ‘930 Patent were unpatentable. The Federal Circuit
`
`affirmed the PTAB’s final written decision holding that none of the challenged
`
`claims of the ‘930 Patent were unpatentable. Avaya Inc. v. Network-1 Techs., Inc.,
`
`612 F. App’x 613, 614 (Fed. Cir. 2015).
`
`12. The ‘930 Patent was also reexamined twice before the Patent Office.
`
`13.
`
`In the first reexamination, the Patent Office issued a reexamination
`
`certification confirming the patentability of all challenged claims and adding
`
`fourteen new claims. Exhibit 2.
`
`14.
`
`In the second reexamination, the Patent Office issued a reexamination
`
`certificate confirming the patentability of all challenged claims. Exhibit 3.
`
`15. The ‘930 Patent has been extensively licensed. Prior to the expiration
`
`of the ‘930 Patent, twenty-eight companies that made, used, and sold PoE products
`
`that comply with the IEEE 802.3af and 802.3at standards have licensed the ‘930
`
`Patent. Licensees of the ‘930 Patent include Cisco Systems, Inc., Alcatel-Lucent
`
`
`
`4
`
`

`

`Case 2:22-cv-08050-CJC-JDE Document 23-1 Filed 04/18/23 Page 5 of 53 Page ID #:126
`
`USA, Sony Corporation, Shoretel Inc., Microsemi Corporation, Motorola
`
`Solutions, Inc., NEC Corporation, Samsung Electronics Co., Ltd., and other
`
`companies that made or sold PoE networking products. Network-1 licensed its
`
`‘930 Patent both in the context of litigation and outside of litigation.
`
`16. To date, licensees have paid Network-1 more than $187,000,000 to
`
`license the ‘930 Patent. 1
`
`17. Although not required under any RAND or FRAND obligation,
`
`Network-1 has been, and continues to be, willing to license its ‘930 Patent on
`
`reasonable and non-discriminatory terms.
`
`18. The claims of the ‘930 Patent are directed to patent-eligible subject
`
`matter. Generally speaking, the ‘930 Patent claims an electronic detection circuit
`
`that (a) determines whether a remote access device connected to an Ethernet data
`
`cable (e.g., a VoIP telephone) is capable of accepting power over the Ethernet
`
`cable (“remote power”), and (b) delivers operating power to remote devices that
`
`can accept remote power.
`
`19. The ‘930 Patent addresses the problem of detecting whether a device
`
`attached to an Ethernet data cable can accept remote power before delivering
`
`
`1 See https://ir.network-1.com/press-releases/detail/208/ (“Network-1’s Remote
`Power Patent generated licensing revenue in excess of $187,000,000.”)
`
`
`
`5
`
`

`

`Case 2:22-cv-08050-CJC-JDE Document 23-1 Filed 04/18/23 Page 6 of 53 Page ID #:127
`
`remote power that might otherwise damage equipment that is not designed to
`
`receive remote power.
`
`20. Determining whether a remote device in an Ethernet environment can
`
`accept remote power is a central aspect of the invention claimed in the ‘930 Patent
`
`because the devices that connect to Ethernet cables include both devices that can
`
`accept remote power (such as a VoIP phone) and devices that cannot (such as a
`
`computer).
`
`21. As set forth in the claims of the ‘930 Patent, the claimed invention
`
`makes these determinations using a “low level current”—a current delivered from
`
`the “data node” (e.g., an Ethernet switch or hub) to the access device (e.g., a VoIP
`
`phone) over the “data signaling pair” that is insufficient to operate the access
`
`device. The delivered “low level current” generates a voltage level on the return
`
`path that identifies the electronic characteristics of the attached remote access
`
`device. The resulting voltage level can be sensed by the internal circuitry of the
`
`data node. If the sensing based on the “low level current” reveals that the access
`
`device can accept remote power, then the detection circuit controls the power by
`
`providing remote operating power over the data signaling pairs (the Ethernet cable)
`
`to the access device (the VoIP phone).
`
`22. The Federal Circuit described the ‘930 Patent as follows:
`
`The ‘930 patent is titled “Apparatus and Method for Remotely
`Powering Access Equipment over a 10/100 Switched Ethernet
`6
`
`
`
`

`

`Case 2:22-cv-08050-CJC-JDE Document 23-1 Filed 04/18/23 Page 7 of 53 Page ID #:128
`
`Network.” It discloses an apparatus and methods for allowing
`electronic devices to automatically determine if remote equipment is
`capable of accepting remote power over Ethernet. See ‘930 patent
`col. 1 ll. 13-17. According to the patented method, a “low level
`current” is delivered over a data signaling pair to an access device
`(also called remote equipment or remote access equipment). Id. at
`col. 2 ll. 8-10. After the low level current is sent, a network switch
`senses the resulting “voltage level” on the data signaling pair. Id. at
`col. 1 l. 65-col. 2 l. 14. If the device can accept remote power, the
`sensed voltage level will match a “preselected condition” of the
`voltage, such as a particular “varying voltage” level. Id. at col. 2 ll.
`10-14, col. 3 ll. 2-17. Upon detecting the preselected condition, the
`network switch will increase the current from the low level to a higher
`level sufficient to allow the “remote equipment [to] become[]
`active.” Id. at col. 3 ll. 17-22. If the preselected condition of the
`voltage is not detected, the network switch will determine that the
`device cannot accept remote power and will not transmit a higher
`current. Id. at col. 3 ll. 3-11.
`
`Network-1 Techs. v. Hewlett-Packard Co., 976 F.3d 1301, 1305 (Fed. Cir. 2020).
`
`23. The claims of the ‘930 Patent fall into patent-eligible categories
`
`authorized by Section 101. Moreover, the claims of the ‘930 Patent are not
`
`directed to any patent-ineligible exception.
`
`INDUSTRY KNOWLEDGE THAT THE ‘930 PATENT COVERS THE
`802.3af AND 802.3at POWER OVER ETHERNET STANDARDS
`
`24. When the IEEE 803.af Power over Ethernet standard was developed,
`
`the ‘930 Patent was identified as a patent that covers the IEEE 802.3af standard.
`
`25. The IEEE (Institute of Electrical and Electronics Engineers) is a
`
`standard-based organization comprising representatives of the major players in the
`
`
`
`7
`
`

`

`Case 2:22-cv-08050-CJC-JDE Document 23-1 Filed 04/18/23 Page 8 of 53 Page ID #:129
`
`networking industry. The IEEE created an 802.3af task force committee to
`
`develop an industry standard for providing Power over Ethernet.
`
`26. By the summer of 2001, the IEEE 802.3af task force had already
`
`selected a detection method for the new Power over Ethernet standard. That
`
`detection method is identical to the one found in the final 802.3af standard used in
`
`Defendant’s Power over Ethernet products.
`
`At that time, some members of the 802.3af task force became aware of the ‘930
`
`Patent and realized that its claims covered the detection method that the 802.3af
`
`task force was adopting as part of the Power over Ethernet standard. As a result,
`
`the Chairman of the IEEE 802.3af task force committee placed the ‘930 Patent on
`
`the agenda for the July 2001 802.3af task force meeting of the committee in the
`
`form of a “Call for Patents”:
`
`
`
`8
`
`

`

`Case 2:22-cv-08050-CJC-JDE Document 23-1 Filed 04/18/23 Page 9 of 53 Page ID #:130
`
`Agenda, July 2001 Plenary Meeting of the 802.3af DTE Power via MDI Task
`
`
`
`Force.
`
`27. As explained on the IEEE’s website, a Chairman of an IEEE standard
`
`committee would include a “Call for Patents” on an agenda and call out a patent
`
`(e.g., the ‘930 Patent) because those involved in developing the standard believed
`
`that the patent was essential for practicing the proposed standard.
`
`28. The ‘930 Patent was the only patent that was ever identified by the
`
`802.3af task force in a “Call for Patents” and placed on an agenda for a task force
`
`meeting.
`
`29. This Agenda identifying the ‘930 Patent as an essential patent for
`
`practicing the 802.3af standard was publicly available to any person or company
`
`
`
`9
`
`

`

`Case 2:22-cv-08050-CJC-JDE Document 23-1 Filed 04/18/23 Page 10 of 53 Page ID
`#:131
`
`who was interested in or concerned about whether the 802.3af Power over Ethernet
`
`standard infringed any patent.
`
`30. After the ‘930 Patent was called out, the members of the 802.3af
`
`committee took information about the ‘930 Patent back to their respective
`
`networking companies for further investigation. Over the following six weeks, key
`
`networking manufacturers expressed concerns that the ‘930 Patent “has become a
`
`major show stopper” to practicing the proposed 802.3af standard. The Chairman
`
`of the 802.3af committee wrote in an email that “key players” in the networking
`
`industry were “very worried about the Merlot 2 patent, specifically the detection
`
`scheme which is pretty much what we do in 802.3af.”
`
`31. The Chairman of the 802.3af committee emailed his supervisor at the
`
`IEEE and declared the ‘930 Patent a “Red Alert!!!” to the proposed 802.3af
`
`standard. As a result, the Chairman of the 802.3af committee and his supervisor
`
`attempted to get a letter of assurance from Merlot, the owner of the ‘930 Patent at
`
`the time. In a letter of assurance, Merlot would agree to license the ‘930 Patent on
`
`reasonable terms to networking companies that manufactured products that would
`
`comply with the proposed 802.3af standard. Representatives of networking
`
`companies on the 803.3af standard committee believed that “[i]f IEEE can get an
`
`
`2 At this time, the ‘930 Patent was owned by Merlot (before it was assigned to Network-1) and
`was referred to as the “Merlot patent.”
`
`
`
`10
`
`

`

`Case 2:22-cv-08050-CJC-JDE Document 23-1 Filed 04/18/23 Page 11 of 53 Page ID
`#:132
`
`assurance letter from Merlot, everybody is happy” because the owner of the ‘930
`
`Patent would be willing to license the patent to the industry.
`
`32. But Merlot did not initially provide a letter of assurance. As a result,
`
`the IEEE 802.3af task force was motivated to look for an acceptable alternative
`
`detection method that would not infringe the ‘930 Patent. But despite spending
`
`significant time and effort evaluating other options, the committee was not able to
`
`come up with an acceptable alternative that could be used for high data speed
`
`applications. As a result, although the IEEE 802.af task force had not yet obtained
`
`a letter of assurance, the IEEE voted on and formally adopted the 802.2af standard
`
`covered by the ‘930 Patent.
`
`33. Although not required, after the 802.3af standard was formally
`
`adopted, Merlot did provide a Letter of Assurance to the IEEE. This Letter of
`
`Assurance identified the ‘930 Patent as essential for any networking company who
`
`wanted to manufacture an 802.3af standard product. Any person or company who
`
`was interested in or concerned about whether the 802.3af standard infringed any
`
`patent could find the ‘930 Patent Letter of Assurance using a simple Google
`
`search:
`
`
`
`11
`
`

`

`Case 2:22-cv-08050-CJC-JDE Document 23-1 Filed 04/18/23 Page 12 of 53 Page ID
`#:133
`
`
`
`34. The IEEE maintains a spreadsheet of patents that are essential for
`
`practicing any 802.3 standard (the Power over Ethernet 802.3af standard is one of
`
`these 802.3 standards). The spreadsheet identifies the ‘930 Patent as essential to
`
`practicing the 802.3af standard (one of only ten patents identified as essential to
`
`practicing the 802.3af standard) and includes a link to the Letter of Assurance for
`
`the ‘930 Patent:
`
`
`
`Any person or company who was interested in or concerned about whether the
`
`802.3af Power over Ethernet standard infringed any patent could find the IEEE’s
`
`spreadsheet using a simple Google search.
`
`35. Since 2005, the ‘930 Patent (often referred to in the Power over
`
`Ethernet industry as the “Remote Power Patent”), has been widely known and
`
`recognized as a “hugely important” patent in the tight-knit standard-based Power
`
`over Ethernet industry. As described below in detail, the following was highly
`
`
`
`12
`
`

`

`Case 2:22-cv-08050-CJC-JDE Document 23-1 Filed 04/18/23 Page 13 of 53 Page ID
`#:134
`
`publicized in press releases and business, technical, industry, and legal articles and
`
`publications:
`
`(a) Network-1’s ‘930 Patent licensing campaigns;
`
`(b) Network-1’s lawsuits asserting its ‘930 Patent against more
`
`than 25 major companies in the Power over Ethernet industry based on the
`
`Power over Ethernet standard;
`
`(c) over 25 licenses for the ‘930 Patent generating over $180
`
`million dollars in royalties covering products that comply with the Power
`
`over Ethernet standard; and
`
`(d)
`
`two trials in which the ‘930 Patent was asserted against seven
`
`major Power over Ethernet manufacturers based on their standard-based
`
`products.
`
`36. Because Network-1 is a public company, Network-1 has to satisfy its
`
`SEC disclosure obligations. Certain details regarding Network-1’s ‘930 Patent
`
`licensing campaigns, its lawsuits asserting its ‘930 Patent, and the terms of its
`
`significant licenses for the ‘930 Patent, were required to be publicly disclosed
`
`through press releases and periodic SEC filings to satisfy Network-1’s SEC
`
`disclosure obligations. As a result, detailed information about Network-1’s ‘930
`
`Patent, its ‘930 Patent licensing campaigns, its lawsuits involving the ‘930 Patent,
`
`and licenses for its ‘930 Patent were widely disseminated through press releases to
`
`
`
`13
`
`

`

`Case 2:22-cv-08050-CJC-JDE Document 23-1 Filed 04/18/23 Page 14 of 53 Page ID
`#:135
`
`the public and in business, technical, industry, and legal articles and publications in
`
`the Power over Ethernet industry.
`
`37. Public disclosure of details of significant patent licenses is rare. As a
`
`result, the publicly disclosed details about the ‘930 Patent licenses attracted
`
`significant attention. This was especially true because the publicly disclosed
`
`details of the ‘930 Patent licenses included the running royalty rates that were
`
`being paid by some major companies in the Power over Ethernet industry for sales
`
`of their Power over Ethernet standard-compliant products.
`
`38. The ‘930 Patent was highlighted and emphasized in these press
`
`releases and publications because Network-1 asserted only a single patent (not a
`
`portfolio of patents) against the Power over Ethernet industry, and there have been
`
`few other patents asserted against the Power over Ethernet standard.
`
`39. As a result, the existence of the ‘930 Patent and the fact that the ‘930
`
`Patent reads on the 802.3af and 802.3at Power over Ethernet standards, was widely
`
`known by business executives and managers, engineers, marketing executives and
`
`managers, product managers and developers, and lawyers working at companies
`
`that manufactured Power over Ethernet products or considered introducing Power
`
`over Ethernet standard-compliant products into the market.
`
`40.
`
`In 2005, Network-1 asserted its ‘930 Patent against D-Link because
`
`D-Link manufactured Power over Ethernet products that complied with the 802.3af
`
`
`
`14
`
`

`

`Case 2:22-cv-08050-CJC-JDE Document 23-1 Filed 04/18/23 Page 15 of 53 Page ID
`#:136
`
`and 802.3at standards. In August 2007, Network-1 licensed its ‘930 Patent to D-
`
`Link Corporation. To comply with its disclosure obligations, Network-1 issued a
`
`press release regarding its license with D-Link. The release publicized that D-Link
`
`would be paying a running royalty for all of its Power over Ethernet products that
`
`comply with the IEEE standards (803.2af and 802.3at) and that the license to the
`
`‘930 Patent covered the same categories of standard-compliant products
`
`subsequently made by Defendant, specifically Power over Ethernet switches,
`
`wireless access points, and cameras:
`
`“The license terms include the agreement by D-Link to license the
`Remote Power Patent … and the payment of monthly royalty
`payments … based upon a running royalty rate of 3.25% of the net
`sales of D-Link branded Power over Ethernet products, including
`those products which comply with the IEEE 802.3af and 802.3at
`Standards.”
`
`“The Remote Power Patent relates to, among other things, the delivery
`of power over Ethernet cables in order to remotely power network
`connected devices including, among others, wireless switches,
`wireless access points, RFID card readers, VoIP telephones and
`network cameras. In June 2003, the Institute of Electrical and
`Electronic Engineers (IEEE) approved the 802.3af Power over
`Ethernet (‘PoE’) standard which has led to the rapid adoption of
`PoE.”
`
`“The products covered by the settlement include D-Link Power over
`Ethernet enabled switches, wireless access points, and network
`security cameras, among others.”
`
`
`
`
`15
`
`

`

`Case 2:22-cv-08050-CJC-JDE Document 23-1 Filed 04/18/23 Page 16 of 53 Page ID
`#:137
`
`41.
`
`In 2008, Network-1, outside the context of litigation, licensed its ‘930
`
`Patent to Microsemi Corp-Analog Mixed Signal Group Ltd. In addition to
`
`manufacturing its own Power over Ethernet products, Microsemi also
`
`manufactures and sells Power over Ethernet chips (i.e., integrated circuits) used by
`
`other manufacturers in their Power over Ethernet products to support Power over
`
`Ethernet functionality. This license with Microsemi, and Network-1’s industry-
`
`wide licensing program for its ‘930 Patent that Network-1 initiated in connection
`
`with the Microsemi license, was highly publicized in a press release and industry
`
`publications. For example, an industry publication (EE Power) identified the ‘930
`
`Patent, disclosed the license with Microsemi, and described Network-1’s ‘930
`
`Patent licensing program:
`
`“Network-1 will commence an industry-wide Special Licensing
`Program for U.S. Patent No. 6,218,930 (the ‘Remote Power Patent’)
`owned by Network-1 to vendors of PoE equipment. The Special
`Licensing Program … is being implemented on an industry-wide basis
`… for the ’930 Patent to PoE vendors ... The new agreement enables
`Microsemi to assist in its customer’s evaluation of the Remote Power
`Patent and the terms being made available to vendors of PoE.”
`
`“Microsemi designs, develops and supplies … integrated circuits and
`modules that enable the implementation of power over Ethernet.”
`
`“‘As has always been our goal, we are committed to simplifying the
`licensing of this critical technology in order to further accelerate the
`growth of PoE,’ said Corey Horowitz, Chairman and CEO of
`Network-1.”
`
`
`
`
`16
`
`

`

`Case 2:22-cv-08050-CJC-JDE Document 23-1 Filed 04/18/23 Page 17 of 53 Page ID
`#:138
`
`42.
`
`In 2008, Network-1 asserted its ‘930 Patent in a lawsuit against eight
`
`major companies in the Power over Ethernet industry based on their Power over
`
`Ethernet 802.3af and 802.3at standard-compliant products, the same types of
`
`standard-compliant products subsequently manufactured by Defendant. Network-
`
`1’s lawsuit against major companies in the Power over Ethernet industry was
`
`highly publicized in a press release, technical and industry publications, and legal
`
`publications. For example, technical publications (such EE Power) reported:
`
`“On February 11, 2008, Network-1 announced it had initiated patent
`litigation against several major data networking equipment
`manufacturers …. for infringement of its Remote Power Patent.
`Named as defendants in the lawsuit were Cisco Systems, Inc., Cisco-
`Linksys, LLC, Enterasys Networks, Inc., 3Com Corporation, Inc.,
`Extreme Networks, Inc., Foundry Networks, Inc., NETGEAR, Inc.,
`and Adtran, Inc.”
`
`43.
`
`In 2009, Network-1 licensed its ‘930 Patent to NETGEAR, Inc. This
`
`license was highly publicized in a press release and in industry, technical, and legal
`
`publications. These releases and publications identified the ‘930 Patent, described
`
`NETGEAR’s license of the ‘930 Patent and Network-1’s ‘930 Patent licensing
`
`program, and described how the NETGEAR license covered the same categories of
`
`Power over Ethernet 802.3af and 802.3at standard-compliant products
`
`subsequently made by Defendant, including switches and wireless access points.
`
`For example, the following information was widely disseminated:
`
`
`
`17
`
`

`

`Case 2:22-cv-08050-CJC-JDE Document 23-1 Filed 04/18/23 Page 18 of 53 Page ID
`#:139
`
`“Under the terms of the license, NETGEAR will license the Remote
`Power Patent… and pay quarterly royalties … based on its sales of
`Power over Ethernet (‘PoE’) products, including those PoE products
`which comply with the Institute of Electrical and Electronic Engineers
`(‘IEEE’) 802.3af and 802.3at Standards.”
`
`“Licensed products include NETGEAR’s PoE enabled switches and
`wireless access points. The royalty rates included in the license are
`1.7% of the sales price of Power Sourcing Equipment, which includes
`Ethernet switches, and 2% of the sales price of Powered Devices,
`which includes wireless access points.”
`
`“‘This outcome is consistent with Network-1’s goal of making
`licenses available to the technologies covered by the Remote Power
`Patent to the Power over Ethernet industry in a manner that promotes
`the widespread adoption of this important industry standard.’”
`
`“the Texas litigation [is] still currently pending, against Cisco
`Systems, Inc., Cisco-Linksys, LLC, Enterasys Networks, Inc., 3Com
`Corporation, Inc., Extreme Networks, Inc., Foundry Networks, Inc.
`and Adtran, Inc. In addition to NETGEAR, other companies that
`signed licenses under the Special Licensing Program are Microsemi
`Corporation, Buffalo Technology, BRG Resources, and SEH
`Corporation.”
`
`“The Remote Power Patent relates to, among other things, delivering
`power over Ethernet cables to remotely power network connected
`devices including, among others, wireless switches, wireless access
`points, RFID card readers, VoIP telephones and network cameras. In
`June 2003, the IEEE approved the 802.3af PoE Standard which led to
`the rapid adoption of PoE. The IEEE is currently working on the
`802.3at Power over Ethernet Plus (PoE Plus) Standard which will
`increase the maximum power delivered to network devices.”
`
`44.
`
`In 2010, Network-1 went to trial against the six major companies in
`
`the Power over Ethernet industry remaining in the pending litigation. Defendant’s
`
`law firm (Jones Day) represented Extreme at the trial. At trial, Network-1 asserted
`
`
`
`18
`
`

`

`Case 2:22-cv-08050-CJC-JDE Document 23-1 Filed 04/18/23 Page 19 of 53 Page ID
`#:140
`
`its ‘930 Patent against products compliant with the Power over Ethernet 802.3af
`
`and 802.3at standards. Defendant’s outside counsel represented one of the
`
`defendants at that trial. The trial in which the ‘930 Patent was asserted against the
`
`Power over Ethernet standard was highly publicized. As a result of the 2010 trial,
`
`before the jury returned a verdict, the remaining six major Power over Ethernet
`
`companies entered into licenses for the ‘930 Patent including what was (and still
`
`is) the largest known license covering the Power over Ethernet standard.
`
`Defendant’s counsel represented Cisco in drafting the license. The six licenses
`
`were highly publicized in legal, industry, and technical publications. For example,
`
`one industry publication reported:
`
`
`
`
`“The litigation was initiated in February 2008 by Network-1
`against Cisco and its Linksys division, Foundry Networks (now
`Brocade), Extreme Networks, Enterasys, 3Com (now HP), Adtran and
`Netgear. At issue was alleged infringement of Network-1’s Remote
`Power Patent, U.S. Patent No. 6,218,930.”
`
`“The settlement calls for approximately $32 million up front with up
`to approximately $80 million in royalty payments from Cisco alone
`over the next nine years. Adtran, Enterasys, Extreme and Foundry
`
`
`
`19
`
`

`

`Case 2:22-cv-08050-CJC-JDE Document 23-1 Filed 04/18/23 Page 20 of 53 Page ID
`#:141
`
`have also agreed to enter into non-exclusive licenses for the Remote
`Power Patent.”
`
`“Under the terms of the licenses, the companies agreed to pay to
`Network-1 an aggregate upfront payment of approximately $32
`million and have also agreed to license the Remote Power Patent …”
`
`“Cisco agreed to pay royalties, beginning in 2011, based on its sales
`of PoE products up to maximum royalty payments per year of $8
`million through 2015 and $9 million per year thereafter for the
`remaining term of the patent.”
`
`45.
`
`In 2011, Network-1 brought patent infringement lawsuits against 16
`
`additional major companies in the Power over Ethernet industry, asserting that its
`
`‘930 Patent read on the Power over Ethernet 802.3af and 802.3at standards. As
`
`disclosed in a press release:
`
`“Named as defendants in the lawsuit … are Alcatel-Lucent USA, Inc.,
`Allied Telesis, Inc., Avaya Inc., AXIS Communications Inc., Dell,
`Inc., GarrettCom, Inc., Hewlett-Packard Company, Huawei
`Technologies USA, Juniper Networks, Inc., Motorola Solutions, Inc.,
`NEC Corporation, Polycom, Inc., Samsung Electronics Co., Ltd,
`ShoreTel, Inc., Sony Electronics, Inc., and Transition Networks, Inc.”
`
`These lawsuits were highly publicized in business, industry, technical, and legal
`
`publications. For example, Bloomberg published:
`
`“Network-1 Files Patent Lawsuit Against Motorola, Sony, HP, Dell -
`Network-1 Security Solutions Inc., the New York-based company that
`received a patent settlement from Cisco Systems Inc. last year, sued
`16 companies including Motorola Solutions Inc., Dell Inc., and Sony
`Corp. The lawsuit … claims infringement of patents for delivering
`power over Ethernet cables.”
`
`
`
`
`20
`
`

`

`Case 2:22-cv-08050-CJC-JDE Document 23-1 Filed 04/18/23 Page 21 of 53 Page ID
`#:142
`
`46.
`
`In 2015, the Cision PR Newswire headlined the fact that the United
`
`States Patent Office confirmed the validity of the ‘930 Patent, referencing the
`
`pending litigation and the major companies in the Power over Ethernet industry
`
`that licensed the ‘930 Patent or were in litigation involving the ‘930 Patent:
`
`“the United States Patent and Trademark Office (‘USPTO’) issued
`Notice of Intent to Issue Ex Parte Reexamination Certificate (‘NIRC’)
`rejecting another challenge to the patentability of Network-1’s
`Remote Power Patent (U.S Patent No. 6,218,930). … The Remote
`Power Patent covers the remote delivery of power over Ethernet
`networks and has generated licensing revenue in excess of $78
`million from May 2007 to date. Network-1 currently has nineteen
`license agreements with respect to its Remote Power Patent, which
`include, among others, license agreements with Cisco Systems, Inc.,
`Cisco Linksys, Inc., Extreme Networks, Inc., Netgear Inc., Motorola
`Solutions, Inc., Allied Telesis, Inc., NEC Corporation, Samsung
`Electronics, Shoretel, Inc. and several other data networking vendors.
`In September 2011, the Company initiated patent litigation against
`sixteen (16) data networking equipment manufacturers … for
`infringement of its Remote Power Patent. Network-1 has now reached
`settlement and license agreements with eight of the original
`defendants. The remaining eight defendants in the lawsuit are
`Alcatel-Lucent USA, Inc., Avaya Inc., AXIS Communications Inc.,
`Dell, Inc., Hewlett-Packard Company, Juniper Networks, Inc.,
`Polycom Inc., and Sony Electronics, Inc.”
`
`47. Network-1 eventually licensed its ‘930 Patent to each of the 16
`
`manufacturers of Power over Ethernet equipment in the lawsuit that Network-1
`
`filed in 2011. These licenses were extensively publicized. Here are some
`
`examples:
`
`
`
`21
`
`

`

`Case 2:22-cv-08050-CJC-JDE Document 23-1 Filed 04/18/23 Page 22 of 53 Page ID
`#:143
`
`48. ShoreTel: In 2015, Network-1 licensed it ‘930 Patent to ShoreTel for
`
`ShoreTel’s Power over Ethernet products. This ‘930 Patent license with ShoreTel
`
`was highly publicized. For example, as reported on the Bloomberg, Cision, and
`
`Telecomworldwire newswires:
`
`“Network-1 Technologies, Inc. (NYSE MKT: NTIP) announced today
`that it agreed to settle its patent litigation against Shoretel … for
`infringement of Network-1’s Remote Power Patent (U.S. Patent No.
`6,218,930). Shoretel was one of sixteen (16) original defendants
`named in the litigation. As part of the settlement, Shoretel entered
`into a settlement agreement and non-exclusive license agreement for
`the Remote Power Patent. Under the terms of the license, Shoretel
`will license the Remote Power Patent … and pay a license initiation
`fee and quarterly royalties based on its sales of Power over Ethernet
`(‘PoE’) products, including those PoE products which comply with
`the Institute of Electrical and Electronic Engineers (‘IEEE’) 802.3af
`and 802.3at Standards. The Remote Power Patent