Box, Carahsoft To Pay $5 Million For Patent Infringement

OpenText won a small patent victory Wednesday with a federal court jury awarding the enterprise information company $5 million in patent infringements from online storage provider Box and government integrator Carahsoft Technology Corporation.

The case is part of a larger back and forth between the two vendor companies over Box's editing product series Box Edit and its core cloud software. OpenText alleged that Box had infringed on three patents through the sale of Box Edit for Mac, Box Edit for Windows and Box Android. Carahsoft, No. 25 on the CRN SP500 list, a partner of both Box and of OpenText, did not respond to CRN's request for comment.

The latest ruling found that both Box and Carahsoft infringed on some of OpenText's patents. Gordon Davies, OpenText Chief Legal Officer and Corporate Secretary, said in a statement that OpenText felt "vindicated" after the decision that patents were infringed and valid.

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"The assertion of these patents is tangible proof to our ongoing efforts to vigorously protect our intellectual property rights and business interests," Davies said in his statement.

The case began in June 2013, with OpenText filing 200 claims across 12 patents in three different patent families against Box. The company was seeking injunctions against sales of the products as well as damages for products already sold, a sum exceeding $268 million. In the end, only three patents were found to be infringed.

Box won a victory in April as the case's judge denied a product injunction for Box Edit, saying that OpenText failed to meet a burden of proof and questioning the validity of some of the patents. All in all, a Box spokesperson said the company is "thrilled with our overall success" with the case.

"Box has always invested in innovation that we believe will transform the way people and organizations work. We don't compete with Open Text directly and it's obvious -- both from this reactionary suit, as well as recent product launches by them -- that they would like to compete with us. This is a simple case of a legacy enterprise software vendor not innovating for its customers, and choosing to attack a new technology entrant.

"We are thrilled with our overall success in this case. At its onset, Open Text’s case involved 12 patents across three patent families (all acquired by Open Text from third parties) and an aggregate of 200 claims against the entire Box collaboration platform. After a series of rulings in Box's favor, the trial ultimately only involved three patents and four claims accusing a single Box feature. Open Text had claimed publicly that they were seeking both preliminary and permanent injunctive relief and damages exceeding $268 million. With only $4.9 million awarded as a lump-sum fully paid up royalty, they obviously fell far short of that, and in the process seven of their patents were found to be invalid."

"We continue to believe strongly that the remaining three patents are not valid and that the Box Edit feature of the Box cloud collaboration platform does not infringe. And we will continue to stand up to companies like Open Text that prioritize litigation over innovation," a Box spokesperson said.