Cisco shares dip; SCOTUS declines Centripetal's $2.5B patent case appeal
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Cisco Systems (NASDAQ:CSCO) shares slipped in to the red Monday even as the U.S. Supreme Court declined to hear an appeal by cybersecurity company Centripetal Networks that would see Cisco pay it $2.75B over a patent dispute.
The Supreme Court declined to hear Centripetal's appeal after the U.S. Court of Appeals for the Federal Circuit negated a previously issued award after the initial judge hearing the case disclosed that his wife owned $4,688 worth of Cisco (CSCO) stock.
In 2020, U.S. District Judge Henry Morgan ruled that Cisco (CSCO) had infringed upon Centripetal's cybersecurity patents and awarded Centripetal $1.9B in damages plus royalties, with the amount totaling approximately $2.75B.
However, prior to the ruling, Morgan told the companies his wife owned 100 shares of Cisco (CSCO), but his decision was not influenced by event and that "virtually every issue" was decided in his ruling before he learned of her stake. The shares were eventually placed in a blind trust.
Morgan died in May 2022.
The U.S. Court of Appeals for the Federal Circuit threw out Morgan's judgement in June and sent it back to a new judge in Virginia after it found that Morgan should have recused himself or made sure the stock was sold, Reuters reported.
Reuters added that the Federal Circuit court said the judge's decision would undermine public confidence and added that it was irrelevant that Morgan ruled in favor of Centripetal, despite it harming his wife's financial interests.
The case number is Centripetal v. Cisco, 22-246.
In mid-November, Cisco (CSCO) reported first-quarter results and guidance that topped expectations, leading to praise from analysts, albeit in a tepid manner.