Centripetal Networks, Inc. v. Cisco Systems, Inc. (E.D. Va. 2020)
Here is the punchline of this recent decision:
The Court FINDS the actual damages suffered by Centripetal as a result of infringement total $755,808,545; that the infringement was willful and egregious and shall be enhanced by a factor of 2.5x to equal $1,889,521,362.50. … The Court, additionally, imposes a running royalty of 10% on the apportioned sales of the accused products and their successors for a period of three years followed by a second three year term with a running royalty of 5% on said sales upon the terms described supra. It DENIES any further relief to Centripetal at the termination of the second three year term.
Apart from the $1.8 billion judgment, the case is interesting because it involved a 22 day bench trial (no jury) via video. Ironically, Cisco had objected to video conferencing — especially because the court was not using Cisco tech. The patents here relate to secure network communications.
The commission for the plaintiff’s counsel patent attorney, assuming 33%, is about $623 million. Talk about motivation to study patent law and to study for the patent bar exam!! Thank you Prof. Crouch for the updates because it was just the kick in the pants I needed to keep studying for the patent bar.
You are counting chickens before they hatch.
. . . and even before their eggs are laid . . .
JR, my understanding is that even fewer patent cases are now taken by law firms on such a one third of recovery contingency fee [the way other kinds of tort cases used to be].
There may have been a negotiated fixed fee or billing rate fee agreement which could include a % of recovery reward for success. But that would not be likely to be collected until after the Fed. Cir. appeal decision and any remand result. [This is not an NPE case, in which most of the damages recovery would go the the NPE and its financiers with perhaps a % to the patent assignor.]
Wow. Just wow.
And here comes Cisco’s appeal; in 1 . . . 2 . . .
The issue isn’t whether Cisco will appeal (it will)…but on what grounds and arguments I will use to appeal.
My quick glance at the decision reveals that the judge was pretty thorough in his reasoning and support of the decision….particularly in the damages area (since he was probably well aware of the current majority on the CAFC’s bent to hammer down large damages awards).
His explanation regarding the Cisco’s massive sales increase (calculated as over $5B for the affected products) following its incorporation of the patent owners tech in 2017 (with evidence that the hardware itself hadn’t actually changed…rather than the integrated software functionality (which was the patented tech) which was added) actually well supports a very large base award ($700+M).
Cisco’s actions at trial…and the very clear evidence from its Cisco’s own tech documents and emails probably led the judge to the large enhancement…and it is pretty clear that some enhancement was justified although the amount awarded was somewhat surprising.
Yes, the judicial damages enhancement here (for willful infringement) was about 2.5 times, but that is within the statutory maximum of trebling. Something that assertions of “efficient infringement” tend to forget. It is inconceivable that Cisco could not have gotten a license or supply arrangement for far less than this $2 billion instead of cutting off negotiations.
“Something that assertions of “efficient infringement” tend to forget. ”
No.
That is not something that assertions of Efficient Infringement tend to forget.
That number is a ceiling – and a rather small one at that.
I would prefer to deter Efficient Infringement by making it a floor, rather than a ceiling, and the upper level would be “until it hurt.”
No question this case will get a CAFC appeal! This is bigger so far than the one billion [with interest] Polaroid v. Kodak 12 patents case, but that amount was as fully collected. I skimmed the lengthy detailed fact-findings, and this is no NPR, PAE or patent troll case. The combined fact-findings or conclusions of law reads to me more like a winning trade secrecy case by a real technology company that was ripped off after a confidential disclosure, even though it is a patent case. I.e., good equities. [Although as a bench trial the fact-findings will of course be somewhat easier to overturn than a jury verdict.]
There was a stay of this trial for several successful IPRs, but they did not knock out all the claims of all the patents in suit.
This was an EDVA Norfolk senior judge named Morgan, not the famous “rocket docket” judge near Washington DC that gets so many patent cases from the PTO and elsewhere.
“and this is no NPR, PAE or patent troll case.”
Why in the world would (or should) that make any difference whatsoever?
Is that not the ultimate indulgence in ad hominem?
I think what Paul means is that it feels good that the big winning plaintiffs were actual productive people, and not landlord-esque parasites.
Your characterization is directly on point as being nothing but as hominem — your “feelings” are contrary to the points of law at hand, and very much are part of the larger problem in the attack on patents.
That you are oblivious to this would seem to only make matters worse.
What was not understood by “I.e., good equities”? Are you in denial of their real-world impact on judges?
I seek not to deny “real world effects,” but to highlight those that are improper.
PTAB and Federal Circuit decide patent matters, not independent Senate-confirmed judges hearing three weeks of evidence and testimony.
Wait, we have independent Senate-confirmed judges these days?
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