After 5 Weeks, Zoom Patent Trial In Cisco Case Nears End

By Ryan Davis
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Law360 (June 11, 2020, 7:29 PM EDT) -- A patent bench trial conducted over Zoom for over a month mostly concluded Thursday, with Centripetal Networks urging a judge to find that Cisco Systems infringed five of its network security patents, and Cisco saying it knows it doesn't infringe "with every bit of conviction."

Both sides presented closing arguments on infringement, validity and willfulness on the 22nd day of the trial, which kicked off on May 6 before a Virginia federal judge using the unusual all-remote format due to the COVID-19 pandemic.

The companies said that damages experts are working on additional reports for the court, so there may be more closing arguments on damages in the coming weeks. At opening arguments last month, Centripetal said Cisco should pay between $445 million to $557 million if it is found to infringe, while Cisco countered that damages should be no more than $3.3 million.

During closing arguments, attorneys for both sides and the judge reflected on the novel experience of conducting a lengthy, complicated patent trial over a videoconference platform, with parties and witnesses appearing from around the country. They all agreed that it went relatively smoothly.

U.S. District Judge Henry Coke Morgan Jr. of the Eastern District of Virginia told the attorneys that "I think the format worked very well," and thanked them for their cooperation in making the unfamiliar setup work.

While the trial did take a long time, the judge said that was because it "involved very complicated and important technology," not because conducting it over videoconference caused delays.

He said that his "ability to evaluate the credibility of the witnesses was probably improved by the format," since he wasn't distracted by anything else happening in the courtroom and could focus on the witnesses and ask them questions as they testified remotely.

"I think we're going to see a lot more evidence presented in this format," Judge Morgan said. "Maybe not a full trial, but there's no reason why you couldn't have a full trial. I believe having the witnesses testify live is more effective than watching a video."

Centripetal attorney Paul Andre of Kramer Levin Naftalis & Frankel LLP told the judge that "this has been an interesting privilege trying the very first Zoom case in federal court. We appreciate your honor's patience with us."

He added that the court's staff made the "truly unique experience" of conducting a full trial over Zoom "as seamless as possible."

Cisco attorney L. Norwood Jameson of Duane Morris LLP told Judge Morgan that his staff has "been amazing in helping us get through this process."

"It's been a long trial and we're all ready to be done," he said.

Both sides then summarized the cases they presented over the past five weeks, with Centripetal, a network security startup founded in 2009, telling the court that it shared key information about its technology with Cisco between 2015 and 2017, during discussions with the tech giant about buying or licensing its patents.

When no deal was reached, Cisco incorporated Centripetal's technology into its network security products, Andre told the court, saying Centripetal became aware of what happened when Cisco issued a press release six months after their last meeting. It announced a "significant breakthrough" in network technology, which resembled Centripetal's inventions, he said.

That press release meant "that nearly eight-and-a-half to nine years of work had been put in jeopardy," he said. "Because when you have the biggest networking company in the world using your technology, it's nearly impossible to compete."

According to Andre, Cisco's argument at trial for why it doesn't infringe amounted to a denial that its products provide security, and he said "that's an incredible statement." He pointed to marketing materials and other public statements by Cisco that he said emphasized that the accused products provide security.

He also noted that while most of Centripetal's top executives testified at trial, "notably absent from Cisco is any of their executives."

"They brought engineers, but not executives. I think that speaks volumes," he said.

Jameson responded forcefully on behalf of Cisco, saying he was "shocked" to hear Andre characterize the company's non-infringement position as being that it doesn't provide network security.

"I literally don't even know what he's talking about," he said, pointing to what he said were thousands of pages worth of books about Cisco's work on network security that were presented as evidence.

"Cisco is proud of the network security that it provides, it just doesn't infringe these patents," he said.

Jameson said that "there is a cavernous gap" between what the patents cover and how Cisco's products work, one that "at times is so big that things just don't make sense."

"We believe in the strength of our case," he said. "With every bit of conviction, we know we don't infringe these patents."

Jameson chided Centripetal for focusing on Cisco's public statements about its products, as opposed to how they technically operate, which he said is what matters in a patent case.

"The least relevant evidence is marketing materials, and that's what they've built their case on," he said.

He also dismissed Centripetal's argument that it was somehow significant that no high-ranking Cisco executives testified at trial, saying that "your honor, this is a patent case, and we're dealing with technical issues."

The company's "most sophisticated, knowledgeable technical subject matter experts" testified, he said, and "that's exactly what you're supposed to do in this case."

The patents-in-suit are U.S. Patent Nos. 9,137,205; 9,203,806; 9,560,176; 9,686,193; and 9,917,856.

Centripetal is represented by Paul J. Andre, Lisa Kobialka, James Hannah, Hannah Lee and Cristina L. Martinez of Kramer Levin Naftalis & Frankel LLP and Stephen E. Noona of Kaufman & Canoles PC.

Cisco is represented by L. Norwood Jameson, Matthew C. Gaudet, John R. Gibson, Jennifer H. Forte, Joseph A. Powers, John M. Baird, Christopher J. Tyson and Nicole E. Grigg of Duane Morris LLP, Neil H. MacBride of Davis Polk & Wardwell LLP, and Dabney J. Carr IV of Troutman Sanders LLP.

The case is Centripetal Networks Inc. v. Cisco Systems Inc., case number 2:18-cv-00094, in the U.S. District Court for the Eastern District of Virginia.

--Editing by Michael Watanabe.

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