cisco-annual-report-2021
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running royalty on future sales. Ramot alleges that certain Acacia optical transceiver modules and integrated circuits infringe
two of the three patents that Ramot has asserted in its E.D. Tex case. On September 3, 2021, the court stayed the case pending
the ultimate resolution of the Reexamination Proceedings. Due to the early stage of the litigation as well as uncertainties in the
litigation processes, we are unable, at this time, to reasonably estimate a potential range of loss, if any, or the ultimate outcome
of this litigation.
Monarch On January 21, 2020, Monarch Networking Solutions LLC (“Monarch”) asserted patent infringement claims against
us in E.D. Tex alleging that certain Cisco routers and firewalls infringe three U.S. patents. On May 13, 2020, Monarch filed
a second action against us in W.D. Tex, alleging that two factor authentication functionality in Duo and Meraki MR and MX
access point products infringe one U.S. patent. On June 24, 2021, we resolved Monarch’s claims in both E.D. Tex and W.D. Tex
for an amount that did not have a material effect on our Consolidated Financial Statements.
Viasat On January 21, 2016, Viasat, Inc. (“Viasat”) filed suit against Acacia (which we subsequently acquired) in the California
Superior Court for San Diego County (“SDSC”) seeking unpaid royalties for breach of contract and the implied covenant of good
faith and fair dealing, and damages for trade secret misappropriation for certain products (“Viasat 1”). Acacia counterclaimed
for patent and trade secret misappropriation, contract, and unfair competition claims. On July 17, 2019, the jury found for Viasat
on its contract claims, and awarded Viasat $49 million for unpaid royalties through 2018. The jury further found that Acacia
willfully misappropriated Viasat’s trade secrets and awarded Viasat $1. On Acacia’s counterclaims, the jury found for Acacia
on its contract and trade secret claims and awarded Acacia $1. Both Acacia and Viasat have pending appeals to the California
Court of Appeal. On November 6, 2019, Viasat filed a second suit in SDSC, alleging contract and trade secret claims for Acacia
products sold from January 1, 2019 forward (“Viasat 2”). On February 28, 2020, the court stayed Viasat 2 pending the appeal
in Viasat 1. On June 9, 2020, Viasat filed a third suit in SDSC (“Viasat 3”). In Viasat 3, Viasat alleges contract and trade secrets
claims for sales of additional Acacia products. On August 11, 2020, the court stayed Viasat 3 pending the appeal in Viasat 1.
On July 28, 2017, Acacia filed suit in the Commonwealth of Massachusetts Superior Court - Business Litigation Session
against ViaSat alleging claims for defamation, unfair competition, business torts, and declaratory judgment of no trade
secret misappropriation. On April 5, 2018, ViaSat counterclaimed with contract, trade secret, and unfair competition claims
(collectively, with Viasat 1, Viasat 2 and Viasat 3, the “Viasat Cases”). On December 13, 2018, the Massachusetts court entered
an order staying the Massachusetts litigation, which has been extended to December 31, 2021.
While we believe Acacia has strong defenses in each of the Viasat Cases, we are unable to reasonably estimate the ultimate
outcome of any of the Viasat Cases at this time due to uncertainties in the litigation processes. If Acacia does not prevail, we
believe that any relief ultimately assessed in any of the Viasat Cases would not have a material effect on our Consolidated
Financial Statements.
In addition, we are subject to other legal proceedings, claims, and litigation arising in the ordinary course of business, including
intellectual property litigation. While the outcome of these matters is currently not determinable, we do not believe that the
ultimate costs to resolve these matters will have a material effect on our Consolidated Financial Statements.
For additional information regarding intellectual property litigation, see “Part I, Item 1A. Risk Factors—We may be found to
infringe on intellectual property rights of others” herein.
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