Wells Fargo, Target Settle VoIP Patent Cases Ahead Of Trial

Law360 (September 13, 2021, 8:43 PM EDT) -- Estech is wrapping up litigation with Cisco, Target, Wells Fargo, and others over patents related to Voice over Internet Protocol technology, including on Friday notifying a Texas federal court of settlements reached in patent infringement suits scheduled to head to trial early October.

On Monday, Cisco Systems Inc. and Estech Systems Inc. notified the court that Cisco had agreed to settle its own claims that Estech willfully infringed multiple Cisco patents for technology used to make voice calls using the internet as well as wrongfully accused some Cisco customers of infringement for using Cisco products. The settlement news comes days after Estech agreed to settle many of the suits it filed against Cisco customers, including claims against Target, Wells Fargo and other banks.

In a joint motion Friday, Estech alongside Target, PlainsCapital Bank, BOKF NA, BBVA USA and Wells Fargo asked the Texas federal court to stay all deadlines in the dispute for 30 days to give the parties time to finalize the settlement terms and move for dismissal of the litigation. Estech — which bills itself as a leader in business phone solutions — lodged separate suits against the defendants in April 2020 alleging that their VoIP telephone systems infringe Estech patents.

The case against Wells Fargo was the first scheduled to go to trial. According to case filings, jury selection, in that case, was expected to begin Oct. 4. The case against BOKF would have gone second.

Last month, a magistrate judge in the Eastern District of Texas recommended denying a motion for summary judgment by the defendants, saying in a report on Aug. 20 that Estech "presents a plausible infringement theory that withstands summary judgment."

On Sept. 3 the defendants urged U.S. District Judge Rodney Gilstrap to overrule U.S. Magistrate Judge Roy Payne's recommendation and grant their motion for summary judgment. Judge Gilstrap had not yet responded to the objections to the report and recommendations before the court was notified a tentative settlement was reached.

Representatives for the parties didn't immediately return requests for additional details about the settlement Monday.

Also on Friday, similar notices of settlements and requests for stays were filed in several other suits Estech filed against companies it accused of violating its VoIP patent, including Regions Financial Corp. and Hancock Whitney Bank.

The Monday notice of settlement filed in Cisco's suit against Estech would end the litigation launched in July. According to the complaint in that suit, Estech filed upwards of 20 lawsuits against purchasers and users of technology offered by Cisco and others, including the suits against Target, PlainsCapital Bank, BOKF NA, BBVA USA and Wells Fargo. Of the 20 patent infringement lawsuits Estech filed against purchasers of VoIP products, at least eight asserted patent infringement claims against Cisco customers, according to the complaint.

Among other claims of infringement, Cisco accused Estech of strategically suing Cisco's customers "rather than Cisco to avoid testing its claims against the suppliers of the accused technology—who have the greatest interest in and ability to defend against these claims—in the hopes of extracting cost of litigation settlements from scores of customers." According to the Monday notice, Cisco and Estech "have reached settlement in principle of all matters in controversy between" them.

Notices of settlement were lodged Friday in many, but not all, of the cases mentioned in Cisco's complaint against Estech.

The patents-in-suit are U.S. Patent Nos. 7,068,684; 7,123,699; and 8,391,298.

Estech is represented by Fred I. Williams, Michael Simons, Todd E. Landis and John Wittenzellner of Williams Simons & Landis PLLC.

Target Corp., PlainsCapital Bank, BOKF NA, BBVA USA and Wells Fargo are represented by Benjamin E. Weed, James A. Shimota, Nicole C. Mueller, Gina A. Johnson, Farris Matariyeh and Ben Roxborough of K&L Gates LLP and Melissa R. Smith of Gillam & Smith LLP.

Cisco is also represented by Benjamin E. Weed, Erik Halverson, Gina A. Johnson and Farris Matariyeh of K&L Gates LLP and Melissa Smith of Gillam & Smith LLP.

The case is Estech Systems Inc. v. Target Corp., case number 2:20-cv-00123, in the U.S. District Court for the Eastern District of Texas.

--Editing by Ellen Johnson.

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