An Eastern District of Virginia trial in a Centripetal Networks case against Palo Alto Networks (2:21-cv-00137) has ended with an infringement verdict for the plaintiff. On January 31, a jury found that certain Palo Alto Networks cybersecurity products infringed four Centripetal patents, down from the 13 previously at issue—the case having been trimmed significantly by the Patent Trial and Appeal Board (PTAB) last year. Additionally, the jury awarded Centripetal $151.1M in lump-sum damages but determined that Palo Alto Networks’s infringement had not been willful, also finding that three of the patents were not “well-understood, routine, and conventional” (based on which those patents may survive a pending Alice challenge). The verdict followed a series of significant setbacks last year in another Centripetal suit: After the Federal Circuit overturned a $2.7B judgment in its case against Cisco in June due to a conflict held by the now-deceased district judge, another district judge overturned the underlying judgment of infringement in December.

Last year, the Federal Circuit made waves with its June 2022 Centripetal Networks v. Cisco decision, which overturned a $2.7B judgment because the district judge discovered his wife’s ownership of stock in the defendant but failed to recuse himself. In recent weeks, some plaintiffs have tried to leverage that opinion in their own litigation—but now, two of those attempts have fallen flat. In the Northern District of California, Judge Yvonne Gonzalez Rogers rejected a motion for recusal from CellSpin Soft Inc., which she hit with a noninfringement ruling this past June, as a meritless “attack on the integrity of the judiciary” that showed a “measure of desperation”. The order came soon after the Patent Trial and Appeal Board (PTAB) denied another such recusal motion, this one from Centripetal Networks, as similarly “lacking in substance” and “baseless”—holding that an administrative patent judge (APJ) owned a small enough interest in joined copetitioner Cisco that he was not required to recuse himself under the applicable regulations.

Last June, the Federal Circuit overturned a bench trial infringement ruling that had led to a $2.7B judgment in Centripetal Networks v. Cisco. The appellate court held that the district judge was disqualified to hear the case after he learned that his wife owned of $5K in the stock of defendant Cisco but then failed to recuse himself. That decision now appears to be having a broader ripple effect: plaintiff Centripetal Networks has raised a similar issue before the Patent Trial and Appeal Board (PTAB), asserting that an inter partes review (IPR) against one of the tried patents has been “tainted” by an administrative patent judge’s (APJ’s) ownership of Cisco stock and other purported financial interests in the company. Meanwhile, in another campaign, plaintiff CellSpin Soft, Inc. has argued that a June 2022 summary judgment of noninfringement should be overturned due to a Northern District of California district judge’s alleged interest in Google, the parent of defendant Fitbit. The Centripetal decision has also been invoked in a closely watched fight over transparency in the courtroom of Delaware Chief Judge Colm F. Connolly, under which certain amici have contended that patent litigants must disclose their ownership/management and funding sources to allow judges to perform a proper conflicts check.

A member of the federal judiciary failed to recuse himself from a case after discovering that the actions of his spouse created an interest in one of the litigants in that case. A new opinion has reversed that failure to recuse, holding that vacatur of all subsequent rulings must follow “perhaps most significantly” because letting stand any rulings made after the interest become known would risk “undermining the public’s confidence in the judicial process”. Here, the interest arose from the spouse’s purchase of roughly $5K in Cisco stock, the subsequent vacatur wiping a multi-billion dollar judgment in favor of Centripetal Networks off the books.

In the fall of 2020, following a 22-day bench trial, Eastern District of Virginia Judge Henry C. Morgan Jr. entered judgment in favor of Centripetal Networks, awarding nearly $2B in enhanced past damages, together with a royalty to run on certain Cisco products in stages over the following several years. An appeal was taken, with the parties (and industry coalitions) briefing a host of issues, principally the propriety of Judge Morgan’s enhancement; however, the Federal Circuit, a couple of weeks beforehand, limited the April 4, 2022 oral argument to whether ownership of 100 shares of Cisco stock by Judge Morgan’s spouse required immediate recusal then and/or vacatur of all subsequent rulings now. Last week, the parties submitted competing supplemental briefs concerning those issues, as Centripetal asks the Eastern District of Virginia to resume more streamlined litigation against Palo Alto Networks there but seeks to expand its dispute with Keysight Technologies with an investigation before the International Trade Commission (ITC).

The Federal Circuit has hit the ground running in the early weeks of 2022, overturning two sizable damages verdicts on February 4: the California Institute of Technology’s (Caltech’s) $1.1B award against Apple and Broadcom and Quarterhill Inc. subsidiary Wi-LAN Inc.’s (WiLAN’s) $85.2M award against Apple. Now, recent activity suggests that at least the latter ruling could potentially have a ripple effect on other large damages awards currently on appeal. The ensuing weeks have seen the defendant-appellants in those cases cite the WiLAN opinion, which faulted a district court for allowing a flawed methodology that was “untethered to the facts of this case”, as relevant authority justifying similar reversals.

Centripetal Networks has filed a third case in the Eastern District of Virginia, this one asserting a dozen network security patents against Palo Alto Networks (1:21-cv-00313), doubling the number of assets litigated in this campaign. Last October Judge Henry C. Morgan Jr. of the same district, following a 22-day bench trial conducted entirely “by Zoom”, entered judgment in Centripetal’s favor and against Cisco, to the tune of nearly $2B in enhanced past damages, together with a royalty to run on certain products in stages for the next several years. Posttrial briefing is well underway before Judge Morgan.

An Eastern District of Virginia bench trial has ended in a judgment of infringement for Centripetal Networks against Cisco, months after the parties waived their right to a jury trial due to complications posed by the COVID-19 pandemic. On October 5, District Judge Henry C. Morgan Jr. handed down a 178-page order deciding the issues from that trial, ruling that Cisco infringed four of the patents remaining in suit through the provision of various network security products but concluding that the company did not infringe a fifth. Judge Morgan found the infringement willful and awarded $1.9B in enhanced damages plus a running royalty, though he declined to issue an injunction.