U.S. Supreme Court turns down Centripetal's appeal to reinstate $2.75 billion Cisco patent award

WASHINGTON Reuters - The U.S. Supreme Court declined to hear a bid by Centripetal Networks Inc to reinstate the largest award in the U.S. patent law - $2.75 billion - to be paid by Cisco Systems Inc in a cybersecurity patent dispute.

The justices turned off Reston, Virginia-based cybersecurity company Centripetal's appeal to a lower court's decision to negate the award after the judge who presided over the trial disclosed that his wife owned Cisco stock worth $4,688.

Since the Wall Street Journal reported last year that dozens of federal judges have been accused of violating federal law by hearing lawsuits involving companies in which they or their families owned stock.

In a federal court in Virginia in 2018, Centripetal sued Cisco, accusing it of infringing patents related to Centripetal's network-security technology.

In May of this year, U.S. District Judge Henry Morgan, who died in May of this year, ruled in 2020 that San Jose, California-based tech company Cisco had infringed the patents. The total was more than $2.7 billion, according to the judge, who awarded Centripetal $1.9 billion in damages and royalties.

Morgan told the companies before issuing his ruling that his wife owned 100 shares of Cisco stock, even though he was unaware of it during the trial. Morgan said he had not influenced his handling of the case and he already had written most of the ruling and decided virtually every issue before learning of her stock. The judge placed the shares in a blind trust.

The U.S. Court of Appeals for the Federal Circuit, which deals with patent issues, threw out the award in June and sent the dispute to a new judge in Virginia. The Federal Circuit found that Morgan either should have recused himself from the case or made sure the stock was sold.

The Federal Circuit said that letting the judge's decision be in the case would undermine the confidence of the public in the judicial process. It was irrelevant that Morgan ruled against his wife's financial interests.

Centripetal told the Supreme Court that Morgan had complied with the law, and that selling the shares just before the decision for Cisco would solve one appearance-of-impropriety problem by creating another.