Commil, an Israeli startup closed down and two years later, selling its assets to a new company, Commil USA LLC, a Non-Practicing Entity, who sued Cisco Systems Inc for patent infringement. Commil USA won the case and was awarded $3.7 million, but nevertheless in late 2010, it asked the court for a new trial.
US District Court for the Eastern District of Texas Judge Charles Everingham approved the motion, based on the claim that Cisco’s attorney made antisemitic remarks against the plaintiff, which were welcomed by the jury.
According to an article in Globes, the Israel Business Paper, see http://www.globes.co.il/serveen/globes/docview.asp?did=1000619459&fid=1725
Commil was founded in 2000 on the basis of a patent registered by its founders, and developed Bluetooth applications. The company raised some $15 million capital from DFJ Tamir Fishman Ventures Ltd. (TASE: TFVC), Gemini Israel Funds, Formula Ventures, and Royal Philips Electronics NV. The company developed products that connect mobile and landline networks, enabling mobile carriers to offer customers disruption-free usage by the management of network traffic.
Although Commil’s patent covered all telecommunications fields, the company gambled on Bluetooth becoming the standard, whereas the market preferred WiFi. The company failed, and, in 2005, Commil fired all its employees. The CEO, Yuval Dovev, decided to return cash assets to the investors. He also put the company’s intellectual property up for sale.
In 2007, Adv. Jonathan David bought Commil’s intellectual property for a few hundred thousand dollars and sued various large telecommunication companies including Motorola Inc., Aruba Networks Inc. and Cisco. Motorola and Aruba settled with Commil USA, but Cisco refused to compromise, and David sued the company in May 2007.
The trial began in May 2010 in the Texas town of Marshall. The jury found that Cisco had violated Commil’s patent and awarded the company $3.7 million. In June 2010, Commil USA filed a motion for a new trial, citing improper remarks by Cisco’s attorney, and what it believed was the low reward; it had asked for $50 million.
The motion for a new trial states that Adv. Otis Carroll of the Ireland Carroll & Kelley PC law firm based in Tyler, Texas described David as a greedy financial investor, who was Jewish by the way, who resided in Israel no less, and sought to take money from the manufacturer, Cisco, which employed thousands of people at its center in Texas. In the closing argument, Carroll made a connection between the case and the trial of Jesus before Pontius Pilate, who ordered the crucifixion. He said that the jurors should stop David before the money window, because he wanted to fill his money bags and take them to Israel.
COMMENT
Aside from the disturbing antisemitic comments, this development is interesting for other reasons. Commil was a high-tech start-up that, like so many, failed.
The CEO, correctly, sold off assets to recoup investor’s losses. Nevertheless, the purchaser, Commil US, is a non practicing entity or troll.
I don’t think it makes the slightest difference morally if the plaintiff is the original company, a new US company set up to collect royalties on technology developed, or a serial troll who purchases patents in order to enforce them. I believe that IP is a property right that may be enforced.
I also believe that US judicial process is overly expensive, have reservations regarding jury trials concerning IP infringement, am not enamoured with the possibility of obtaining injunctions against infringers, favour compulsory licensing and generally feel the US IP enforcement system requires overhauling. Nevertheless, I consider trolling a positive business model.
Posted by Dr Michael Factor 
