VMware’s acquisition of VeloCloud may be overshadowed by a little press release issued last week. The release came from FatPipe who laid claim to load balancing over disparate networks, a technology used by pretty much every SD-WAN player.

On November 1, FatPipe® Networks, holder of multiple patents for software-defined networks for wide area connectivity and hybrid WANs,  announced that the United States PTO Patent Court has upheld a signature claim in FatPipe’s U.S. Patent No. 6,775,235 for load balancing over disparate networks.

FatPipe’s 6,775,235 patent describes a system and method for communicating using two or more disparate networks in parallel, allowing for failover and load balancing of session flows and re-directing packets over multiple networks. This path selection ability represents the foundation of a hybrid WAN and the primary component of a SD-WAN solution.

You can read their press release here. I just spoke with the patent counsel for Talari and in his word’s Fatpipe’s press release is not correct. The patent office has not proven that the claim is valid.

FatPipe has sued multiple parties on two of its patents (U.S. Patent 7,406,048 and U.S. Patent 6,775,235) including 36 claims against Talari Networks. Those cases were stayed so that the U.S. Patent Office could review FatPipe’s patents. Last week, the U.S. Patent Office issued two separate decisions against FatPipe.

The first decision held that all 24 claims of FatPipe’s ‘048 patent were unpatentable. (See IPR2016-00977 FD FINAL.pdf). The second decision held that all but one of the 12 challenged claims of FatPipe’s ‘235 patent were unpatentable. (See IPR2016-00976 FD FINAL.pdf). The single remaining claim was not, as was suggested by FatPipe, ruled to be valid and in fact is still being challenged in other proceedings, including by Cisco and Talari.

So FatPipe lost 35 of 36 claims before its cases even got warm and tried to sell it as good news. That’s good news for SD-WAN users who are unlikely to have to worry about FatPipe coming after them any time soon.

Are we headed for a legal war in the SD-WAN world? Could  the VeloCloud acquisition be disrupted by FatPipe’s claims?: I am interested in hearing what you think as to the veracity of their claims and the effect they will have on the market.

Regardless of the effect that this judgement will have on the market, patent infringement cases are not unusual in the networking industry. Enterprises can and should protect themselves to avoid any problem.

It’s not very difficult.

Make sure your contracts have the appropriate patent indemnification language included. It’s standard for all of the vendor contracts that we help negotiate for our customers and your supplier should be doing the same. The language has the vendor warrant that they legally own the technology and in the case of a problem, they will cover any third-party claims against the customer. Remember that vendor contracts are designed to protect the vendor, not you. So you need to protect yourself. Also recognize that patent infringements are not necessarily malicious.  In a face paced development process, many people can come up with the same ideas, not realizing that its already been patented.  But then again, sometimes the technology users will push the envelope to meet their goals.

Reach out to me if you need help with your contract. A lawsuit is the last thing you want to factor into your IT budgets!