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6 December 2022PatentsStaff Writer

Cisco escapes $2.8bn patent verdict at SCOTUS

Long-running dispute concerns alleged infringement of US cybersecurity patents | District judge nullified award after discovering his wife had Cisco shares | US Court of Appeals for the Federal Circuit previously threw out a multi-million dollar verdict.

The US Supreme Court has declined to hear Centripetal Networks’ appeal to reinstate a $2.75 billion verdict against Cisco in a cybersecurity patent clash.

Yesterday, December 5, the justices rejected Centripetal’s bid to overturn a lower court’s decision to throw out the award after the judge who presided over the dispute disclosed that his spouse owned shares in Cisco.

Back in 2018, Centripetal Networks accused Cisco of infringing 11 of its US cybersecurity patents.

In response, Cisco requested inter partes reviews for nine of the patents and the US Patent Trial and Appeal Board (PTAB) invalidated claims on several of the patents.

Proceedings went ahead on five of the patents at the US District Court for the Eastern District of Virginia.

District judge Henry Morgan issued a ruling  in favour of Centripetal, holding that Cisco had wilfully infringed four of the five asserted patents.

Centripetal was awarded $1.9 billion in damages, as well as a running royalty of 10% on the apportioned sales of Cisco products related to the patents for three years, which Cisco said amounted to $2.75 billion in total.

However, following final arguments, the judge notified the parties that his spouse owned 100 shares of Cisco stock, valued at $4,687.99, and placed the shares in a blind trust.

On appeal against the ruling, the US Court of Appeals for the Federal Circuit threw out the award in April and remanded the case back to a new judge in Virginia.

Centripetal then submitted a petition for a writ of certiorari to the Supreme Court.

In its petition, Centripetal said: “The Federal Circuit wiped out a multibillion-dollar judgment without so much as considering the merits, and gave short shrift to the district court’s concerns that the outright sale of Cisco stock on the eve of a ruling against Cisco could create its own appearance problems.”

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More on this story

Patents
16 December 2021   Two alliances representing the US’ largest patent litigators and inventors have thrown their support behind cyber security startup Centripetal Networks, following the company’s $1.9 billion infringement win against Cisco Systems.
Patents
21 March 2022   The US Court of Appeals for the Federal Circuit will hear arguments on whether a district court judge should have recused himself from proceedings before handing down a $1.9 billion patent infringement judgment against Cisco when he discovered his wife held shares in the tech company.