District Court Overturns Jury Verdict of Invalidity and Finds Network-1’s Remote Power Patent Valid
August 30 2018 - 8:00AM
Network-1 Technologies, Inc. (NYSE AMERICAN: NTIP), a company
engaged in developing, licensing and protecting its intellectual
property, announced today that Judge Robert Schroeder III of the
United States District Court for the Eastern District of Texas
Tyler Division, issued a Final Judgement (the “Final Judgment”) and
corresponding Order in Network-1’s patent litigation case against
Hewlett-Packard.
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.
ABOUT NETWORK-1 TECHNOLOGIES, INC.
Network-1 Technologies, Inc. is engaged in the
development, licensing and protection of its intellectual property
and proprietary technologies. Network-1 works with inventors
and patent owners to assist in the development and monetization of
their patented technologies. Network-1 currently owns fifty-nine
(59) patents covering various telecommunications and data
networking technologies as well as technologies relating to
document stream operating systems and the identification of media
content. Network-1’s current strategy includes continuing to pursue
licensing opportunities for its Remote Power Patent and its efforts
to monetize three patent portfolios (the Cox, Mirror Worlds and
M2M/IoT Patent Portfolios). Network-1’s acquisition strategy is to
focus on acquiring high quality patents which management believes
have the potential to generate significant licensing opportunities
as Network-1 has achieved with respect to its Remote Power Patent
and Mirror Worlds Patent Portfolio. Network-1’s Remote Power Patent
has generated licensing revenue in excess of $141,000,000 from May
2007 through June 30, 2018. Network-1 has achieved licensing and
other revenue of $47,150,000 through June 30, 2018 with respect to
its Mirror Worlds Patent Portfolio.
This release contains forward-looking statements
within the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. These statements address
future events and conditions concerning Network-1’s business plans.
Such statements are subject to a number of risk factors and
uncertainties as disclosed in the Network-1’s Annual Report on Form
10-K for the year ended December 31, 2017 filed with the Securities
and Exchange Commission, including, among others, the material
adverse effect on Network-1’s business, results of operation and
cash-flow if the Federal Circuit Court of Appeals issues an order
confirming the HP Jury Verdict finding of non-infringement, the
risk that Network-1 will not continue to receive material royalty
revenue from licensees of its Remote Power Patent, the uncertainty
of Network-1’s revenue stream, the ability of Network-1 to
successfully execute its strategy to acquire high quality patents
with significant licensing opportunities, Network‑1's ability to
achieve revenue and profits from its Cox Patent Portfolio, its
M2M/IoT Patent Portfolio and additional revenue and profit from its
Mirror Worlds Patent Portfolio as well as intellectual property it
may acquire in the future, the ability of Network-1 to enter into
additional license agreements, uncertainty as to whether cash
dividends will continue be paid, the uncertainty of patent
litigation and proceedings at the United States Patent and
Trademark Office, the difficulty in Network-1 verifying royalty
amounts owed to it by its licensees, Network-1's ability to enter
into strategic relationships with third parties to license or
otherwise monetize their intellectual property, the risk in the
future of Network-1 being classified as a Personal Holding Company,
future economic conditions and technology changes and legislative,
regulatory and competitive developments. Except as otherwise
required to be disclosed in periodic reports, Network-1 expressly
disclaims any future obligation or undertaking to update or revise
any forward-looking statement contained herein.
Corey
M. Horowitz, Chairman and CEO |
Network-1 Technologies, Inc. |
(212)
829-5770 |
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