U.S. networking giant Cisco Systems Inc has been ordered, by a U.S. judge, to pay $1.9 billion to a Virginia-based company which had accused it of infringing on its cybersecurity patents.
After a month of a non-jury trial, U.S. District Judge Henry Morgan in Norfolk, Virginia, found Cisco of infringing on four Centripetal Networks Inc’s patents.
In a 167-page ruling, Morgan said the case was “not a close call,” citing inconsistencies in Cisco’s evidence and that its own technical documents, many of which Centripetal itself introduced at trial, “proved Centripetal’s case.”
The payout includes an $1.89 billion award, reflecting $755.8 million in actual damages suffered by privately held Centripetal multiplied by 2.5 to reflect Cisco’s “willful and egregious” conduct, plus prejudgment interest.
“Cisco did not advance any objectively reasonable defenses at trial” as to the four patents, wrote Morgan. “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”.
In a statement, Cisco said it was disappointed with the decision, “given the substantial evidence of non-infringement, invalidity and that Cisco’s innovations predate the patents by many years.”
It now plans on filing an appeal in the U.S. Federal Circuit Court of Appeals.
In its latest fiscal year, Cisco posted a net income of $11.2 billion from $49.3 billion in revenues.
“With this judgment, the court rejected the primitive doctrine that might makes right,” said Paul Andre, a lawyer for Centripetal. “This is a significant win for all small, innovative companies.”
The case is Centripetal Networks Inc v Cisco Systems Inc, U.S. District Court, Eastern District of Virginia, No. 18-00094.