DCT
5:17-cv-13770
Cisco Systems Inc v. Chrimar Systems Inc
Key Events
Complaint
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Cisco Systems, Inc. (California)
- Defendant: ChriMar Systems Inc. d/b/a CMS Technologies (Michigan)
- Plaintiff’s Counsel: Kirkland & Ellis LLP; Kerr, Russell and Weber, PLC
- Case Identification: 5:17-cv-13770, E.D. Mich., 11/20/2017
- Venue Allegations: Venue is alleged to be proper as Defendant ChriMar is incorporated in Michigan, maintains a regular and established place of business in the state, and has had substantial contacts with the state.
- Core Dispute: Plaintiff Cisco seeks a declaratory judgment that its Power over Ethernet products do not infringe Defendant ChriMar’s patent related to network device identification, and that the patent is unenforceable due to ChriMar's alleged failure to disclose it to a standards-setting organization.
- Technical Context: The dispute centers on Power over Ethernet (PoE) technology, which allows a single Ethernet cable to transmit both data and electrical power, a foundational technology for modern networked devices like IP phones and wireless access points.
- Key Procedural History: The complaint details an extensive history of litigation initiated by ChriMar against numerous technology companies, including Cisco, over a portfolio of patents related to the patent-in-suit. Central to this new action is the allegation that ChriMar and its inventor participated in the IEEE's PoE (802.3af/at) standard-setting process but deliberately failed to disclose the patent family, which ChriMar now asserts is essential to practicing the standard, potentially giving rise to an unenforceability defense based on equitable estoppel or inequitable conduct.
Case Timeline
| Date | Event |
|---|---|
| 1998-04-10 | Earliest Priority Date Claimed by '825 Patent (Provisional App. 60/081,279) |
| 2003-06-18 | IEEE 802.3af PoE standard set |
| 2009-09-11 | IEEE 802.3at PoE standard set |
| 2017-11-07 | U.S. Patent No. 9,812,825 issues |
| 2017-11-20 | Complaint for Declaratory Judgment filed |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 9,812,825 - "Ethernet Device"
- Patent Identification: U.S. Patent No. 9,812,825, "Ethernet Device", issued November 7, 2017.
The Invention Explained
- Problem Addressed: The patent addresses the high Total Cost of Ownership (TCO) for networked computer assets, citing challenges in tracking equipment, preventing theft, and securing sensitive information. Specifically, it notes that existing software-based methods are flawed because they typically require the asset to be powered on and cannot reliably determine physical location or detect unauthorized hardware. (’825 Patent, col. 1:35-col. 2:4).
- The Patented Solution: The invention provides a system for identifying, tracking, and managing networked assets by communicating over the existing Ethernet wiring without using the network's data-carrying bandwidth. It achieves this by injecting a low-power DC signal onto the communication lines. A module attached to the asset can then modulate its current draw to transmit a unique identification number or other status data back to a central monitoring system, even when the asset itself is not connected to AC power. (’825 Patent, Abstract; col. 2:7-32; Fig. 3).
- Technical Importance: The technology enables physical-layer asset management that is independent of the main device's power state, offering a way to track and secure equipment continuously. (’825 Patent, col. 2:7-20).
Key Claims at a Glance
- The complaint seeks a declaratory judgment of non-infringement of all claims of the '825 Patent (Compl., Prayer for Relief ¶A). The complaint notes that in separate litigation, ChriMar has asserted independent claims 1 and 38, among others (Compl. ¶24).
- Independent Claim 1:
- A BaseT Ethernet device configured to interrogate for predetermined response via at least one direct current (DC) signal, comprising:
- an Ethernet jack connector with first and second pairs of contacts for carrying BaseT Ethernet communication signals;
- at least one DC supply coupled to contacts of the first and second pairs; and
- the device is configured to provide or receive a DC signal where the predetermined response is carried by at least two different magnitudes in the flow of the DC signal.
- Independent Claim 38:
- A powered-off BaseT Ethernet device configured to be interrogated for a predetermined response via at least one DC signal, comprising:
- an Ethernet jack connector;
- at least one path for drawing at least one DC signal, coupled across contacts of the connector; and
- the device is configured to receive or return a DC signal where the predetermined response is carried by at least two different magnitudes in the flow of the DC signal.
III. The Accused Instrumentality
Product Identification
- Cisco's products that implement the IEEE 802.3af and/or IEEE 802.3at Power over Ethernet (PoE) standards, including but not limited to IP telephones, wireless access points (WAPs), network switches, and security cameras (Compl. ¶¶4, 40, 53).
Functionality and Market Context
- The accused functionality is a core feature of the PoE standards, specifically the "detection and classification protocols" (Compl. ¶25, citing Ex. B ¶63). In a PoE system, Power Sourcing Equipment (PSE), such as a network switch, provides DC power over Ethernet cabling to a Powered Device (PD), such as an IP phone (Compl. ¶¶37, 40). Before full power is supplied, the PSE and PD engage in a negotiation. This involves the PD drawing different, specified magnitudes of DC current to signal its presence (detection) and how much power it requires (classification) (Compl. ¶25, citing Ex. B ¶¶56, 63).
- The complaint alleges that ChriMar's theory of infringement is that any product compliant with these IEEE PoE standards necessarily infringes the ’825 Patent (Compl. ¶25). These products are fundamental components of modern enterprise and government data and voice networks (Compl. ¶¶28, 40).
- No probative visual evidence provided in complaint.
IV. Analysis of Infringement Allegations
The complaint seeks a declaratory judgment of non-infringement and lays out the infringement theory it anticipates from ChriMar, based in part on allegations ChriMar made in a separate lawsuit against Panasonic (Compl. ¶¶23-25). The following chart summarizes this anticipated infringement theory against Claim 1 of the '825 Patent.
U.S. Patent No. 9,812,825 Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| A BaseT Ethernet device configured to interrogate for predetermined response via at least one direct current (DC) signal | Cisco's Power Sourcing Equipment (PSE) products that comply with the IEEE 802.3af/at standards allegedly perform detection and classification of powered devices (PDs) by providing a DC voltage. | ¶25 | col. 17:35-42 |
| at least one direct current (DC) supply... coupled to at least one of the contacts of the first pair of contacts and at least one of the contacts of the second pair of contacts | The complaint notes ChriMar's prior allegation that a PSE compliant with the IEEE 802.3af standard must include a DC supply to perform detection and classification of a PD. | ¶25 | col. 17:46-54 |
| the predetermined response carried by at least two different magnitudes in the flow of the at least one direct current (DC) signal | The complaint describes ChriMar's theory that PDs compliant with the IEEE 802.3af standard provide a "predetermined response" by drawing different magnitudes of DC current to present a "valid detection signature" as required by the standard's detection and classification protocols. | ¶25 | col. 17:55-62 |
Identified Points of Contention
- Scope Questions: A primary issue may be whether the term "interrogate for predetermined response," as used in the patent, can be construed to cover the PoE standard's power negotiation protocol. The patent specification heavily focuses on asset identification, tracking, and security as the purpose of the invention (’825 Patent, col. 1:35-col. 2:32), whereas the PoE protocol's purpose is to safely manage power delivery. This raises the question of whether there is a fundamental mismatch in the claimed purpose and the accused functionality.
- Technical Questions: The "predetermined response" in the PoE standard signals a device's power class, not a unique identification number as described in the patent's embodiments (’825 Patent, col. 5:10-14). A key technical question will be whether signaling a generic power requirement constitutes the same type of "response" as signaling a unique device identity.
V. Key Claim Terms for Construction
- The Term: "to interrogate for predetermined response" (Claim 1)
- Context and Importance: This phrase is at the heart of the dispute. Its construction will determine whether the patent's scope is limited to systems for asset identification or is broad enough to cover the power negotiation functions of the PoE standards. Practitioners may focus on this term because the patent's specification appears to tie the "response" to identification data, while ChriMar's alleged infringement theory applies it to power classification signals.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The claim language itself does not explicitly limit the "response" to identification data, which may support an interpretation that any pre-defined electrical reaction to a stimulus signal falls within the claim's scope.
- Evidence for a Narrower Interpretation: The patent’s Abstract, Background, and Summary of the Invention sections consistently frame the invention as a solution for asset tracking, identification, and security (’825 Patent, Abstract; col. 1:35-col. 2:32). The detailed description links the "response" to transmitting a "unique identification number" (’825 Patent, col. 5:10-14), which may support a narrower construction tied to asset identification.
VI. Other Allegations
- Unenforceability and Business Tort Allegations: The complaint includes several counts beyond non-infringement, centered on ChriMar's conduct before the IEEE, the body that created the PoE standards.
- Unenforceability: Cisco alleges the ’825 Patent is unenforceable due to "unclean hands," equitable estoppel, and inequitable conduct. The core allegation is that ChriMar's founder and the patent's inventor, John Austermann, participated in IEEE meetings that led to the 802.3af/at standards, but deliberately failed to disclose the pending patent applications that ChriMar now claims are essential to practice those standards (Compl. ¶¶41-48, 62-66).
- Breach of Contract and Fraud: Cisco asserts it is a third-party beneficiary to an implied contract between ChriMar and the IEEE, created by IEEE's intellectual property policies, which ChriMar allegedly breached by failing to disclose its patent rights (Compl. ¶¶67-71). Cisco also alleges fraud, claiming it and other industry participants relied to their detriment on the integrity of the standards process, which was compromised by ChriMar's alleged concealment (Compl. ¶¶86-92).
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of claim scope: Can the term "interrogate for predetermined response," which is rooted in the patent’s context of asset identification and security, be construed to read on the automated power negotiation protocol of the IEEE PoE standard?
- A second dispositive issue will be equitable: Does the evidence show that ChriMar, through its participation in the IEEE standard-setting process, engaged in a "patent ambush" by failing to disclose its pending intellectual property, and if so, does that conduct render the '825 patent unenforceable against companies like Cisco that have implemented the resulting standard?
- A final set of questions will relate to causation and damages for the business tort claims: Can Cisco prove that it was harmed by ChriMar’s alleged failure to disclose its patents to the IEEE, and that it would have acted differently had the disclosures been made?