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Cisco cites judge’s family stock holdings in bid to eliminate $2.7 billion award

A person passes by the Cisco stand at the GSMA’s Mobile World Congress (MWC) 2022 in Barcelona, ​​Spain, March 1, 2022. REUTERS/Albert Gea

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  • Virginia judge learned about his wife’s Cisco actions before ruling against
  • Cisco said the judge should have recused himself

(Reuters) – Cisco Systems Inc told a U.S. appeals court on Monday that a $2.7 billion patent against it should be thrown out because the presiding judge’s wife owned shares in the company.

A three-judge panel of the United States Court of Appeals for the Federal Circuit appeared receptive to Cisco’s argument that U.S. District Judge Henry Morgan should have recused himself from the case, although he did not indicate how he would decide.

Centripetal Networks Inc sued Cisco in federal court in Virginia in 2018 for infringing on its cybersecurity patents. Morgan held a claims test bed in May and June 2020.

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Morgan told parties in August that he learned his wife owned 100 Cisco shares. He ruled in October that he was not required to recuse himself because he was unaware of it during the trial, and that he had already written the decision and decided “virtually all the issues” before he knew about it .

Morgan also said his wife set up a blind trust to dispose of the shares.

Three days later, Morgan order Cisco is to pay $1.9 billion to Centripetal for willfully infringing the patents, plus royalties that Cisco says bring the price to more than $2.7 billion.

On appeal, Cisco Recount the Federal Circuit that Morgan should have disqualified himself from the case and asked the appeals court to reopen it.

Centripetal attorney Paul Andre of Kramer Levin Naftalis & Frankel told the court during oral argument Monday that there was no allegation that Morgan was biased and that the judge went “above and beyond.” to meet ethical requirements.

“But he didn’t give in,” Circuit Judge Timothy Dyk said. “Assuming putting it in a blind trust isn’t an assignment, well, he didn’t assign it – the law told him exactly what to do and he didn’t.”

Andre replied that Morgan had done “what he thought was right in the spirit of the law”, and said overturning his decision “would have a much harder time on how the judiciary is perceived” than leaving it in place.

Cisco attorney Mark Fleming of Wilmer Cutler Pickering Hale & Dorr also said the divestment actually requires giving up ownership of the stock, citing statements from the US government.

US Circuit Judges Richard Taranto and Tiffany Cunningham were also on the panel.

The case is Centripetal Networks Inc v. Cisco Systems Inc, United States Court of Appeals for the Federal Circuit, No. 21-1888.

For Cisco: Mark Fleming of Wilmer Cutler Pickering Hale & Dorr

For Centripetal: Paul André de Kramer Levin Naftalis & Frankel

Read more:

Cisco must pay $1.9 billion for patent lawsuit, US judge says

Cisco’s new trial offer rejected after $1.9 billion patent infringement case

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