The judge reportedly scaled-up the fine due to the “wilful and egregious” conduct of Cisco

On Monday, after a lengthy trial, US District Judge Henry Morgan ruled that Cisco had indeed infringed on four patents held by Centripetal Networks related to their cybersecurity solutions. He ruled that Cisco was liable to pay $755.8 million in damages suffered by Centripetal, with the amount increased 2.5-fold to around $1.9 billion to punish Cisco for their poor conduct. 


The trial has been a long time coming. Cisco was first accused of infringing on Centripetal’s patents in 2018, a year after the latter company shared details of their technology under a non-disclosure agreement. Despite this, the technology’s functionality was quickly incorporated into Cisco’s own products in 2017, prompting Centripetal to sue.  


“The fact that Cisco released products with Centripetal’s functionality within a year of these meetings goes beyond mere coincidence,” said District Judge Henry Morgan. In the judgement he also noted the duplicitous nature by which Cisco had “continually gathered information from Centripetal as if it intended to buy the technology from Centripetal,” but then “appropriated the information gained in these meetings to learn about Centripetal’s patented functionality and embedded it into its own products.”


Cisco’s defense in the trial seems to have been limited. While they themselves have said that they are disappointed by the judge’s ruling – and would likely appeal it – given the “substantial evidence of non-infringement” and that it had developed the technology before the founding of Centripetal. However, the Judge disagreed.


“Cisco did not advance any objectively reasonable defenses at trial,” read the judgement. In fact, some of the evidence was even contradictory.


“Cisco’s invalidity evidence often contradicted its non-infringement evidence and failed to recognize the new functionality which it copied from Centripetal during and after the Nondisclosure Agreement,” said the Judge.


Another novelty of the trial was the way it was held online. With virtual meetings so ubiquitous in the current environment, the idea of a virtual trail should not sound too alien, though Cisco reportedly lobbied for the court to use its own Webex video conferencing system instead of Zoom, the system on which the court staff had been trained. This insistence likely soured the court’s opinion of the company before the trial even began, though the judge did not that Cisco’s lawyers conducted themselves well and additional punitive fees had been spared due to their “professional performance” under difficult circumstances. 


For Centripetal, this win over Cisco is something of a David versus Goliath story, with one of their lawyers, Paul Andre, calling the result “a significant win for small, innovative companies”, rejecting the principle that “might makes right”.


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