Cisco ordered to pay $1.9b in cyber patent loss

The networking giant will appeal the decision, however.
Written by Campbell Kwan, Contributor

Cisco has been ordered by a US District judge to pay over $1.9 billion to a Virginian security company for infringing upon four cybersecurity patents.

Senior District Judge Henry Morgan made the decision following a month-long trial over video conference, saying it was "clear and not a close call". The trial did not use a jury due to the coronavirus pandemic.

The Virginian company, Centripetal Networks, made the allegations at the start of 2018 after it claimed Cisco's network devices used its solutions and patents.

According to Morgan, virtually all of Cisco's exhibits, technical documents, and demonstratives for the trial focused on its old technology rather than the accused products.

"Their demonstratives of the functionality of Cisco's accused products were not based upon their own current technical documents, but rather upon inaccurate animations produced post facto for use in the litigation which served to confuse the issues, rather than inform the court," Morgan said.

"Most of Cisco's challenges amounted to no more than conclusory statements by its experts without evidentiary support."

The $1.9 billion owed to Centripetal Networks comprises of $1.89 billion in damages and $13.7 million in interest. 

While the actual damages suffered by Centripetal Networks amounted to around $755 million, the court multiplied that figure by 2.5 times to reflect Cisco's wilful and egregious conduct in infringing upon the cybersecurity patents. 

In addition, the court also ordered a running royalty of 10% on the apportioned sales of Cisco's products that infringed upon Centripetal Network's patents. These royalties will be provided for a period of three years followed by a second three-year term of a running royalty of 5%.

Cisco said it was disappointed with the decision and would make an appeal at the US Court of Appeals for the Federal Circuit.

"We are disappointed with the trial court's decision given the substantial evidence of non-infringement, invalidity and that Cisco's innovations predate the patents by many years," Cisco said in a statement.

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