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Cisco CEO John Chambers
But that's not going to stop it from fighting, the company tells Business Insider.
Cisco is being sued by a company called Commil USA under some unusual circumstances.
Commil claims that Cisco's tech violates a patent involving how WiFi networks cover large areas, reports Ars Technica's Joe Mullin.
Cisco has already lost two trials to Commil. In the first, Cisco was ordered to pay $3.7 million, reports Mullin. But Commil was seeking $57 million and it asked for a new trial based on some questionable, allegedly anti-Semitic sentiments expressed by Cisco's lawyer during the trial.
For instance, during the trial, Cisco's lawyer talked about how Commil's owner probably didn't eat pork, and tried to invoke Jesus, telling jurors to "remember the most important trial in history, which we all read about as kids, in the Bible," reports Mullin.
The judge agreed with Commil, and ordered a new trial, which Cisco also lost. This time Cisco was told to pay $63.8 million.
Cisco appealed that verdict and won. So Commil appealed to the Supreme Court, and it was Cisco's defense that got the court's attention. Cisco argued a "good-faith belief that Commil's patent was invalid."
In other words, Cisco argued, if Cisco thought the patent was invalid, it shouldn't be held liable for violating it.
The Supreme Court didn't buy it. On Tuesday it ruled: "A defendant's belief regarding patent validity is not a defense to an induced infringement claim."
This ruling is going to disappoint a lot of big tech companies.
Commil is an Israeli patent-holding company does not produce any products, but simply uses its patents to seek licenses from other companies - these types of companies are sometimes referred to by the nasty term "patent troll."
Commil started life as a Bluetooth startup but folded and sold its assets, including its patents, to a lawyer, reports Israeli publication Globes. The lawyer used the patents to sue Cisco.
So-called "patent trolls" are a big problem for big tech companies. That's why a consortium of tech companies took an interest with this case and filed a brief in support of Cisco, including HP, Dell, Dropbox, Facebook, Google, Red Hat and Oracle. They were hoping the "good faith" defense would fly as an easier way to defend against so-called trolls.
There is a little bit of good news for Cisco in all this: Although the Supreme Court wasn't buying the "good faith belief" defense, it didn't command Cisco to pay the big fine. It sent the case back to the appeals court.
A Cisco spokesperson tells us, "The federal circuit's ruling vacating the jury verdict in this case still stands. Today's decision simply eliminates one of many strong defenses available to Cisco and we look forward to the retrial of the case."