Patent Probe Can Proceed Despite Judge’s Cisco Stock Ownership

Cybersecurity firm Centripetal Networks LLC can’t halt a US Patent and Trademark Office tribunal’s validity review of a patent that was part of a wiped-out $1.9 billion verdict against Cisco Systems Inc., the Federal Circuit ruled Tuesday.

Although the verdict in the high-profile patent-infringement case was vacated due to Cisco stock owned by the presiding judge’s wife, the Federal Circuit said a parallel challenge to the patent’svalidity lodged against Centripetal can proceed in the face of an administrative patent judge owning a small amount of Cisco stock.

If successful, the administrative case could undermine Centripetal’s district court case against Cisco, which is up for a new trial.

“Centripetal has not shown that it will be unable to raise its arguments after a final written decision, which is expected to issue shortly,” Senior Judge Evan Wallach wrote.

Centripetal’s petition, filed in March, sought to wipe out all the decisions in the administrative case and to have a brand new panel of administrative judges take up the threshold decision of whether to institute an inter partes review of the patent.

Rival firm Palo Alto Networks Inc. filed the underlying challenge to US Patent No. 9,917,856 at the Patent Trial and Appeal Board, with Keysight Technologies Inc. and Cisco later joining in the challenge.

Centripetal told the Federal Circuit the board’s actions thus far should be undone because Brian J. McNamara, one of the three administrative patent judges who originally agreed to hear the patent challenge, owned between $1,001 and $15,000 in Cisco stock and received retirement income from a law firm that did lobbying work for the company.

McNamara and another judge ultimately left the panel, and the PTAB refused to shut down the case or abandon its decisions, including one allowing Cisco to join in the challenge. The board determined that McNamara’s Cisco stock holdings fell below a federal recusal threshold for executive branch employees, and it said Centripetal took McNamara’s former firm’s work out of context.

The Federal Circuit said Centripetal hasn’t been harmed thus far in the process, especially in light of Cisco’s secondary role in the proceeding, which has yet to actually reach whether the challenged claims are invalid.

“We cannot say that Centripetal has shown a clear and indisputable right to vacatur, particularly given the lack of any evidence that Cisco was involved in the proceedings at the time of institution, Cisco’s backup capacity status, and the fact that APJ McNamara will not be a member of the panel that decides the ultimate merits in the IPR proceeding,” Wallach wrote.

Judges Alan D. Lourie and Sharon Prost also sat on the panel.

Dowd Scheffel PLLC represents Centripetal. Ropes & Gray LLP represents Palo Alto. Haynes and Boone LLP represents Cisco.

The case is In re: Centripetal Networks, LLC, Fed. Cir., No. 23-127, petition denied 5/16/23.