Paltalk Holdings, Inc. Awarded $65.7 Million Jury Verdict Against Cisco Systems Inc.

Rhea-AI Summary

Paltalk (NASDAQ: PALT) has been awarded a $65.7 million jury verdict against Cisco Systems Inc. for patent infringement. The verdict, delivered by a jury in the District Court for the Western District of Texas, relates to U.S. Patent No. 6,683,858. Paltalk filed the lawsuit on July 23, 2021, alleging that certain Cisco products infringed on this patent.

The award is subject to post-trial proceedings, potential appeals by Cisco, and final judgment by the Court. Paltalk estimates it will receive no more than one-third of the gross proceeds after deducting significant litigation-related expenses, including legal fees. Susman Godfrey LLP and Cherry Johnson Siegmund James served as legal counsel for Paltalk in this case.

Positive

• Jury awarded Paltalk $65.7 million in patent infringement case against Cisco
• Potential significant financial gain for Paltalk, estimating to receive up to one-third of the gross proceeds

Negative

• Award is subject to post-trial proceedings and potential appeals by Cisco
• Significant litigation-related expenses will reduce the net proceeds for Paltalk

Insights

Legal Expert

This verdict marks a significant legal victory for Paltalk in the realm of patent infringement. The $65.7 million award is substantial, potentially setting a precedent for future tech patent cases. However, it's important to note that this isn't the end of the road. Post-trial proceedings and potential appeals by Cisco could significantly impact the final outcome. The fact that Paltalk estimates receiving only about 33% of the gross proceeds highlights the hefty costs associated with such litigation. This case underscores the importance and value of intellectual property in the tech sector, serving as a reminder for companies to vigorously protect their patents.

Financial Analyst

While the $65.7 million verdict appears substantial, investors should temper their expectations. Paltalk's disclosure that they expect to receive no more than one-third of the gross proceeds is telling. After accounting for legal fees and other litigation-related expenses, the net gain may be significantly lower. Moreover, the uncertainty surrounding post-trial proceedings and potential appeals adds a layer of risk. That said, even a fraction of this award could be meaningful for a smaller company like Paltalk. Investors should monitor how the company plans to utilize any windfall, whether for R&D, debt reduction, or shareholder returns. This verdict could also potentially enhance Paltalk's bargaining power in future licensing negotiations.

Tech Expert

This verdict highlights the ongoing battle over intellectual property in the tech industry. The patent in question, U.S. Patent No. 6,683,858, likely relates to important communication technology. For Paltalk, a company focused on multimedia social applications, successfully defending this patent against a tech giant like Cisco validates their innovation and could strengthen their market position. However, the tech landscape is rapidly evolving and the long-term value of this patent remains uncertain. It's worth noting that such legal victories can sometimes lead to cross-licensing agreements or strategic partnerships, potentially opening new doors for Paltalk in the competitive communications software market.

JERICHO, NY, Aug. 30, 2024 (GLOBE NEWSWIRE) -- Paltalk, Inc. (“Paltalk,” the “Company,” “we,” “our” or “us”) (Nasdaq: PALT), a communications software innovator that powers multimedia social applications, today announced that a jury in the District Court for the Western District of Texas (the “Court”) has awarded the Company $65.7 million in a verdict against Cisco Systems, Inc. (“Cisco”) for infringing U.S. Patent No. 6,683,858.

As previously disclosed, on July 23, 2021, Paltalk Holdings, Inc., a wholly owned subsidiary of the Company, filed a patent infringement lawsuit (the “Lawsuit”) against Cisco in the U.S. District Court for the Western District of Texas, 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 a jury verdict in connection with the Lawsuit, which remains subject to post-trial proceedings (including any potential appellate proceedings by Cisco) and the entry of a final judgment by the Court. 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) and the entry of a final judgment by the Court. Susman Godfrey LLP and Waco-based Cherry Johnson Siegmund James served as legal counsel to Paltalk in connection with the Lawsuit.

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.

To be added to our news distribution list, please visit: http://www.paltalk.com/investor-alerts/.

FORWARD-LOOKING STATEMENTS:

This press release contains “forward-looking statements.” Such statements may be preceded by the words “intends,” “may,” “will,” “plans,” “expects,” “anticipates,” “projects,” “predicts,” “estimates,” “aims,” “believes,” “hopes,” “potential,” or similar words. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. Forward-looking statements in this press release may include, but are not limited to, statements relating to the anticipated net proceeds to be received by the Company in connection with the Lawsuit. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control, including but not limited to the timing of and final outcome of the Lawsuit, including any potential appeals, the ultimate payment of litigation-related expenses in connection with the Lawsuit and the risk factors set forth in the Company’s filings with the Securities and Exchange Commission (“SEC”), including the Company’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC’s website at www.sec.gov.

All forward-looking statements speak only as of the date on which they are made. The Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement was made, except to the extent required by applicable securities laws.

Investor Contacts:
IR@paltalk.com
ClearThink
nyc@clearthink.capital
917-658-7878

FAQ

What is the amount of the jury verdict awarded to Paltalk (PALT) in the patent infringement case against Cisco?

The jury awarded Paltalk (PALT) $65.7 million in the patent infringement case against Cisco Systems Inc.

When did Paltalk (PALT) file the patent infringement lawsuit against Cisco?

Paltalk Holdings, Inc., a wholly owned subsidiary of Paltalk (PALT), filed the patent infringement lawsuit against Cisco on July 23, 2021.

Which patent was involved in Paltalk's (PALT) lawsuit against Cisco?

The lawsuit involved U.S. Patent No. 6,683,858, which Paltalk (PALT) alleged was infringed by certain Cisco products.

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

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