Cisco Dodges A Legal Bullet: Court Reportedly Rejects Centripetal's Patent Infringement Claims

Cisco Systems, Inc. CSCO has reportedly emerged victorious in a legal battle as a federal judge in Virginia dismissed patent infringement claims made by cybersecurity company Centripetal Networks in a multi-billion-dollar dispute centered on network security technology.

In 2020, U.S. District Judge Henry Morgan, presiding in the same court, had initially granted Centripetal a record $2.75 billion patent damages award against Cisco, marking the largest such award in U.S. history, according to a news report by Reuters. 

However, this decision was later reversed by a federal appeals court on ethics grounds, citing the ownership of Cisco stock by Morgan's wife, the report read.

Before announcing his decision, Morgan disclosed to both parties that he had recently discovered his wife's ownership of 100 shares of Cisco stock valued at $4,688, asserting that he was unaware of this holding during the trial and that it had not affected his judgment in the case, Reuters added.

In 2020, following a non-jury trial, Judge Morgan ruled in favor of Centripetal, awarding the company $1.9 billion in damages. This amount, along with additional royalties, escalated the total sum to over $2.7 billion, as per the report.

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Following the passing of Judge Henry Morgan, the case was reassigned as per the directive of the appeals court, it added. 

U.S. District Judge Elizabeth Hanes, who conducted new hearings, ruled on Monday that Cisco did not infringe upon the patents initially claimed by Centripetal Networks, the Reuters report added.

In 2018, Centripetal Networks, based in Reston, Virginia, filed a lawsuit against Cisco, alleging that Cisco's routers, network-security software, and various other products infringed on patents pertaining to Centripetal's technology designed to prevent security threats from penetrating computer networks, the report noted.

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Price Action: CSCO shares are trading lower by 0.33% to $49.17 on the last check Wednesday. 

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.