Cisco wriggles out from $2bn patent payout

Cisco has managed to avoid a $2-plus billion payment for patent infringement on a technicality hat has nothing to do with the patents.

The case has its roots in 2018 when an outfit named Centripetal Networks alleged Cisco had stolen tech Centripetal described to it under a non-disclosure agreement.

Centripetal sued and won. U.S. District Judge Henry Morgan described Cisco’s behaviour as “willful and egregious” and slapped it with over $2 billion in fines and royalties.

Then came a twist.

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During the conduct of the case the judge learned that his wife held $4,688 worth of shares in Cisco, a potential conflict of interest. The judge and his wife moved those shares into a blind trust. He then ruled for Centripetal and said most of his thinking in the case had been done well before he realised the shares could be a problem.

That judgement was appealed, not because of any error in reasoning regarding payments but over the issue of whether hanging onto the shares represented a “harmless error” that could be excused, or a conflict of interest that could not be ignored.

A Federal appeals court felt the latter argument had merit – even though the decision was bad news for Cisco and could devalue the shares Morgan’s wife held. Centripetal’s patent payment was therefore in jeopardy.

Centripetal was understandably miffed and asked the Supreme Court to reconsider the Federal Court judgement.

On Monday the Supremes denied a petition to hear the case.

Cisco is therefore off the hook, despite its poor behaviour.

Neither party appears to have made a public remark about the matter at the time of writing. The Register imagines Centripetal’s people may have decided that white hot rage is not the best state in which to speak about the case. ®

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