Paltalk Holdings Announces Judge Enters Final Judgment in Connection With Cisco Jury Verdict

Rhea-AI Summary

Paltalk, Inc. (NASDAQ: PALT) announced that on October 8, 2024, a final judgment was entered in the District Court for the Western District of Texas regarding their patent infringement lawsuit against Cisco Systems, Inc. The judgment follows a jury verdict on August 29, 2024, which awarded Paltalk $65.7 million for alleged infringement of U.S. Patent No. 6,683,858.

The final judgment, signed by Judge Alan D. Albright, starts the clock for post-trial motions or appeals. Paltalk estimates it will receive no more than one-third of the gross proceeds after deducting significant litigation-related expenses, including legal fees. The exact amount is subject to post-trial proceedings and potential appeals by Cisco. Paltalk holds 8 issued US Patents and intends to continue defending them vigorously.

Positive

• Jury awarded Paltalk $65.7 million in patent infringement lawsuit against Cisco
• Final judgment entered, confirming the award
• Paltalk holds 8 issued US Patents, potentially valuable for future litigation

Negative

• Paltalk estimates receiving only one-third of the gross proceeds due to litigation expenses
• Exact amount of award proceeds is uncertain and subject to post-trial proceedings
• Potential for appeal by Cisco could delay or reduce the final payout

Insights

Legal Expert

The final judgment in Paltalk's patent infringement lawsuit against Cisco marks a significant legal victory, with a $65.7 million award. This outcome underscores the value of Paltalk's intellectual property and sets a precedent for future patent enforcement. However, investors should temper expectations, as the company estimates receiving only up to 33% of the gross proceeds after deducting legal fees and expenses. The potential for Cisco to appeal adds uncertainty to the timeline and final amount Paltalk may receive. This case highlights the importance of patent portfolios in the tech sector and may positively impact Paltalk's negotiating position for future licensing deals. The company's commitment to "vigorously defend" its 8 US patents suggests a strategy of monetizing its IP assets, which could be a significant revenue stream if successful.

Financial Analyst

This judgment represents a substantial windfall for Paltalk, potentially boosting its cash position by up to $21.7 million (one-third of $65.7 million). For a company with a market cap of just $24.1 million, this influx could be transformative, potentially funding R&D, acquisitions, or shareholder returns. However, the exact impact remains uncertain due to potential appeals and the final calculation of expenses. Investors should watch for how management plans to allocate these funds, as it could significantly influence the company's growth trajectory and valuation. The successful patent defense may also attract attention from larger tech companies, potentially leading to licensing agreements or even acquisition interest. While the immediate financial impact is positive, the long-term value lies in Paltalk's ability to leverage this victory for sustainable growth and recurring revenue from its patent portfolio.

JERICHO, N.Y. , Oct. 11, 2024 (GLOBE NEWSWIRE) -- Paltalk, Inc. (“Paltalk,” the “Company,” “we,” our,” or “us”) (NASDAQ: PALT), announced today that on October 8, 2024, an order granting a motion for final judgment (the “Final Judgment”) was entered into in the District Court for the Western District of Texas (the “Court”) in connection with the Company’s patent infringement lawsuit (the “Lawsuit”) against Cisco Systems, Inc. (“Cisco”).

As previously disclosed, on July 23, 2021, Paltalk Holdings, Inc., a wholly owned subsidiary of the Company, filed the Lawsuit against Cisco in the Court, pursuant to which the Company alleged that certain of Cisco’s products infringed U.S. Patent No. 6,683,858, and that the Company was entitled to damages. On August 29, 2024, the jury awarded the Company $65.7 million (the “Award”) in connection with the Lawsuit.

The Final Judgment, which was signed by Judge Alan D. Albright, was entered in favor of the Company in the amount of the Award and starts the time for filing any post-trial motions or appeal.

The exact amount of the Award proceeds to be received by the Company will be determined based on a number of factors and will reflect the deduction of significant litigation-related expenses, including legal fees. Consequently, the Company estimates that it would receive no more than one third of the gross proceeds in connection with the Award, subject to post-trial proceedings (including any potential appellate proceedings by Cisco).

Paltalk holds 8 issued US Patents that the Company will continue to vigorously defend.

ABOUT PALTALK, INC. (Nasdaq: PALT)

Paltalk, Inc. is a communications software innovator that powers multimedia social applications. Our product portfolio includes Paltalk and Camfrog, which together host a large collection of video-based communities. Our other products include ManyCam, Tinychat and Vumber. The Company has an over 20-year history of technology innovation and holds 8 patents. For more information, please visit: http://www.paltalk.com.

Investor Contacts:

IR@paltalk.com
Clearthink
nyc@clearthink.capital
(917) 658-7878

FAQ

What was the outcome of Paltalk's patent infringement lawsuit against Cisco?

On August 29, 2024, a jury awarded Paltalk $65.7 million in their patent infringement lawsuit against Cisco. This was followed by a final judgment entered on October 8, 2024, confirming the award.

How much of the $65.7 million award does Paltalk (PALT) expect to receive?

Paltalk estimates it will receive no more than one-third of the gross proceeds from the $65.7 million award after deducting significant litigation-related expenses, including legal fees.

What is the next step in the legal process for Paltalk (PALT) following the final judgment?

The final judgment starts the time for filing any post-trial motions or appeals. The exact amount of the award proceeds is subject to post-trial proceedings, including potential appellate proceedings by Cisco.

How many patents does Paltalk (PALT) currently hold?

Paltalk holds 8 issued US Patents, which the company intends to continue defending vigorously.