A court error allowed Cisco to escape paying €2.6 billion in damages — the largest amount ever awarded in a US patent infringement case.

A US judge found the organization guilty of patent infringement in 2020. During the trial, the judge discovered that his wife owned shares of Cisco. The verdict was set aside because of a conflict of interest.

Centripetal Networks, the case’s plaintiff, recently appealed the court’s decision. The US Supreme Court denied the appeal and ruled that the case must be retried. In doing so, Cisco escapes paying €2.6 billion in damages.

Patent infringement

Centripetal will have to go through the lawsuit for the second time. The organization filed the initial complaint in 2018. Centripetal accused Cisco of stealing network security technology. In 2020, a judge ruled in Centripetal’s favour.

The verdict amounted to €2.6 billion in damages. Just before concluding the case, the judge discovered that his wife held about €4,500 in Cisco shares. The verdict was abolished as a result.

US judges generally aren’t allowed to have personal ties to the individuals or organizations involved in a lawsuit. The Cisco-Centripetal case was assigned to a new judge.

Charges

Although the new judge may reach a similar conclusion, the outcome is a blow to Centripetal. Lawsuits cost time and money. The organization ends up paying for a court’s error.

US judges are required to be aware of their financial and personal interests by law. In this case, the judge should never have started the lawsuit in the first place. “It’s another example of people losing a lot of money when judges screw up”, Penn State University law professor Ben Johnson told Bloomberg.

Earlier this year, the Biden administration signed a law requiring courts to maintain a database of financial interests such as stock holdings among judges and their family members. For Centripetal, the law offers little relief. “We will have to do it all again”, COO Jonathan Rogers said.

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