Cisco wins reversal of $2.75 billion damages award because judge's wife owned stock

By:  Reuters
09:57 06/23/2022

(Reuters) - A U.S. appeals court on Thursday ruled in favor of Cisco Systems Inc, overturning a more than $2.75 billion award of damages and royalties to Centripetal Networks Inc, a Virginia company that accused it of copying its cybersecurity patents.

In a 3-0 decision, the U.S. Federal Circuit Court of Appeals in Washington said the trial judge should have disqualified himself upon learning that his wife owned Cisco stock. It said the case should be reassigned to another judge.

The trial judge, U.S. District Judge Henry Morgan in Norfolk, Virginia, learned in August 2020 that his wife owned 100 Cisco shares worth $4,688, and told the parties that the shares "did not and could not have influenced" his handling of the case.

But the appeals court said letting Morgan stay on the case risked undermining public confidence in the judicial process.

"It is seriously inimical to the credibility of the judiciary for a judge to preside over a case in which he has a known financial interest in one of the parties and for courts to allow those rulings to stand," Circuit Judge Timothy Dyk wrote for the appeals court.

(Reporting by Jonathan Stempel in New York; Editing by Mark Porter and Jonathan Oatis)

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