A $1.9 billion patent infringement verdict made in October 2020 against Cisco Systems Inc. was struck down by the US Court of Appeals for the Federal Circuit after the judge who levied the penalty was found to have financial interest in the company.
Judge Henry Morgan learned in 2020 that his wife was the owner of Cisco stock worth under $4,700. Morgan was then disqualified from the proceedings and all orders passed in court by him after he learnt of the stocks were vacated. He had released his opinion days after he had denied Cisco’s request to recuse himself because of the stock ownership.
In accordance with federal law a judge is required to disqualify themselves if they or a family member has a financial interest to any of the parties in the proceeding. The court even brushed aside the argument that the stocks owned were on the ‘loosing side’.
The suit began when Centripetal Networks Inc. sued Cisco for allegedly infringing cyber-security patents.
Centripetal claimed that Cisco used its network protection technology in Cisco’s popular network switches and routers and monitoring offering that analyze data. Centripetal also asked for 10% royalties in some products for a period of five years.
The company claims it lost government contracts due to the patent violations. The patents for the malware detection technology in data packs was obtained by Centripetal in 2018 March.