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Supreme Court rejects Centripetal appeal in Cisco patent dispute



(Reuters) – The U.S. Supreme Court declined on Monday to hear a bid by Centripetal Networks Inc. to reinstate the largest award in the history of U.S. patent law — $2.75 billion — to be paid by Cisco Systems Inc. in a cybersecurity patent litigation.

The justices rejected Reston, Virginia-based cybersecurity company Centripetal’s appeal of a lower court’s decision to deny the award after the judge presiding over the trial revealed that his wife owned $4,688 worth of Cisco stock.

Legal conflicts of interest have drawn increased attention since the Wall Street Journal reported last year that dozens of federal judges had violated federal law by hearing lawsuits involving companies in which they or their families owned stock.

Centripetal sued Cisco in federal court in Virginia in 201

8, accusing the company of infringing patents related to Centripetal’s network security technology.

US District Judge Henry Morgan, who died in May of this year, ruled in 2020 after a non-jury trial that San Jose, California-based technology company Cisco had infringed the patents. The judge awarded Centripetal $1.9 billion in damages plus royalties, which Cisco said brought the total to more than $2.7 billion.

Judge Morgan told the companies before issuing his ruling that his wife owned 100 shares of Cisco, although he was not aware of it during the trial. He said it had not affected his handling of the case and that he had already written most of the judgment and decided “basically all the issues” before learning of her share. The judge placed the shares in a blind trust.

The U.S. Court of Appeals for the Federal Circuit, which specializes in patent matters, threw out the award in June and sent the dispute back to a new judge in Virginia. The Federal Circuit found that Judge Morgan should have either recused himself from the case or arranged for the stock to be sold.

The Federal Circuit said that allowing the judge’s decision in the case to stand would undermine public confidence in the judicial process. It also found it irrelevant that Judge Morgan ruled against his wife’s financial interests.

Centripetal told the Supreme Court that Judge Morgan had followed the law and that a sale of the shares just before the ruling for Cisco would “solve one problem of appearance of impropriety by creating another.”


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