Cisco Hit With $1.9B Fine In Centripetal Patent Lawsuit – Report


Cisco Systems has been ordered to pay $1.9 billion in a patent infringement lawsuit brought by privately held cybersecurity solutions provider Centripetal Networks, Reuters reported.

According to the Reuters report, the ruling was issued by US District Judge Henry Morgan in Norfolk, Virginia, who stated that the case was “not a close call” citing inconsistencies in Cisco’s evidence and that the company’s own technical documents, many of which Centripetal itself introduced at trial, “proved Centripetal’s case.”

Virginia-based Centripetal Networks claimed that Cisco (CSCO) used its software solutions and patents for its network devices. It first made the allegations at the beginning of 2018.

Reuters reported that the District Judge came to the conclusion that Cisco engaged in “willful and egregious” infringement of four out of five patents held by Centripetal. (See CSCO stock analysis on TipRanks).

Cisco was disappointed with the ruling and intends to appeal, “given the substantial evidence of non-infringement, invalidity, and that Cisco’s innovations predate the patents by many years.”

On Sept 2, Merrill Lynch analyst Tal Liani reiterated a Buy rating on Cisco stock with a price target of $50 stating that the company has limited exposure to China and its market share is further shrinking due to the US-China trade war.

The analyst believes that the potential inclusion of Cisco on the Chinese blacklist is likely to produce a minimal impact on the company of around 2%.

The rest of the Street has a cautiously optimistic outlook with a Moderate Buy analyst consensus based on 10 Buys and 9 Holds with no Sells. The average analyst price target of $48.93 implies upside potential of about 26.9% in the coming months. Shares have declined 19.6% year-to-date.

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