Cisco slapped with $1.9 billion judgement in security patent lawsuit

Cisco this week lost a patent infringement case brought by security vendor Centripetal Networks and was hit with a $1.9 billion judgement.

A non-jury judgement from U.S. District Judge Henry Morgan determined Cisco infringed on four security patents related to encrypted traffic and packet filtering technology belonging to plaintiff Centripetal Networks. The award directs $755.8 million in actual damages, multiplied by 2.5 to reflect “willful and egregious” conduct from Cisco, the judge found. 

The award also includes past damages and a running royalty of 10% on the apportioned sales of the patented products for a period of three years, followed by a second three-year term with a running royalty of 5% on such sales, which could take damages from the case north of $3 billion, according to a Centripetal statement about the case.

“…Cisco did not advance any objectively reasonable defenses at trial as to the four infringed and valid patents,” Morgan wrote. The case was “not a close call,” the judge stated.

According to a Bloomberg story about the case, Centripetal Networks said it developed a network protection system, funded in part by a grant from the Department of Homeland Security, only to see Cisco integrate the inventions into its own networks after meetings and presentations by Centripetal officials in 2017.

“The infringing functionality was added to their accused products post June 20, 2017, and resulted in a dramatic increase in sales which Cisco touted in both technical and marketing documents,” the judgement stated.

“The fact that Cisco released products with Centripetal’s functionality within a year of these meetings goes beyond mere coincidence.”

For its part, Cisco said the litigated features were developed well before the time period referred to in the case, and that it would appeal the ruling.  

“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. We look forward to the Federal Circuit’s review on appeal,” the company said in a statement.