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October 6, 2020 10:20 pm

Cisco Ordered To Cough Up $2 Billion Plus Royalties After Ripping Off Biz's Cybersecurity Patents

Cisco has been hit with a massive $1.9 billion patent-infringement bill for copying cybersecurity tech from Centripetal Networks and pushing the company out of lucrative government contracts. The Register reports: The network switch maker infringed four patents, a Virginia court decided on Monday, but since the infringement was "willful and egregious," the judge multiplied the $756 million owed by 2.5 to a total fine of $1,889,521,362.50. With interest, Cisco faces a hefty $1,903,239,287.50 bill "payable in a lump sum due on the judgment date," the court said. The four patents are: US 9,203,806, 9,560,176, 9,686,193, and 9,917,856. That's not all: the court also imposed [PDF] a royalty of ten per cent of some of Cisco's products for the next three years, and five per cent for three years after that. That royalty must be at least $168 million and no more than $300 million for the first three years, and between $84 million and $150 million for the next three, the judge said. Even though the sums are massive, they are far from ruinous, and represent about three months of profit for Cisco. The networking giant also has a massive cash pile of roughly $30 billion that the total bill will barely eat into. As for the tech itself, Centripetal Networks, based in Virginia, developed a network protection system that was in part funded by the US government. The patented parts of it deal with speed and scalability issues, and allowed for live updates and automated workflows. It outlined the technology to Cisco after the company had signed a non-disclosure agreement. But then Cisco simply stole the functionality and incorporated it into its own products in 2017. Centripetal sued [PDF] the following year. "The fact that Cisco released products with Centripetal's functionality within a year of these meetings goes beyond mere coincidence," said District Judge Henry Morgan in his judgment. He noted that Cisco had "continually gathered information from Centripetal as if it intended to buy the technology from Centripetal," but then "appropriated the information gained in these meetings to learn about Centripetal's patented functionality and embedded it into its own products."

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