Cisco Seeks New Trial After $1.9 Billion Patent Loss to Startup

Cisco Systems Inc. asked for a new trial after a federal district court judge ordered it pay $1.9 billion for infringing a Virginia startup’s cybersecurity patents.

In a motion filed Monday, Cisco argued the judge’s Oct. 5 ruling included new theories of infringement and damages that Centripetal hadn’t presented and that Cisco had no chance to defend against.

Cisco said had it been aware the court was considering these different theories, its presentation would have changed and it would have offered additional evidence related to things like invalidity and damages.

It asked for a new trial “to permit Cisco to submit additional evidence and argument in response to the new theories.”

Damages Award
Judge Henry Morgan’s ruling followed a weekslong bench trial in the U.S. District Court for the Eastern District of Virginia, which was conducted over Zoom because of the coronavirus pandemic.

The judge found Cisco willfully infringed Centripetal’s patented network security technology and implemented it into various Cisco products. Centripetal has said the award may end up from $2.6 billion to $3.2 billion with additional royalties.

But Cisco argued that when calculating damages, the judge used certain sales data “in a way that Centripetal never had.” This data was used to support both a higher royalty rate and the judge’s finding of willful infringement, Cisco said.

In a separate filing Monday, Cisco took aim at Centripetal’s damages arguments, calling them “unsupported.” It said the damages award covers products that were used in non-infringing systems.

The highest award supported by the evidence, if any, is around $3 million, Cisco said.

Centripetal is represented by Kaufman & Canoles PC and Kramer Levin Naftalis & Frankel LLP. Cisco is represented by Troutman Pepper Hamilton Sanders LLP, Davis Polk & Wardwell LLP and Duane Morris LLP.

The case is Centripetal Networks Inc. v. Cisco Systems Inc., E.D. Va., No. 18-cv-00094, Motion filed 11/2/20.

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