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Palo Alto Networks ordered to pay $151.5 million in patent clash

By Nithya Bose in Business News, posted February 4, 2024

Palo Alto Networks has been ordered to pay Centripetal Networks $151.5 million in damages over a patent dispute.

A jury verdict found the cybersecurity firm guilty of infringing on four of Centripetal's patents.

The federal court in the Eastern District of Virginia ruled on Wednesday, January 31, assigning roughly $37.9 million in damages for each violated patent.

A Palo Alto Networks spokesperson said: “We respectfully disagree with the jury’s decision, which we believe is contrary to both the law and the extensive evidence we presented at trial.”

The dispute centers around Palo Alto Networks’ Cortex cybersecurity platform and Next-Generation Firewall product.

Centripetal argued the product unlawfully incorporated its patented technology designed to detect and thwart hackers by analyzing and filtering network traffic.

The contention arose from a failed partnership discussion in 2016.

During the time, Centripetal disclosed proprietary technology details to Palo Alto Networks, only to see no collaboration materialize.

Centripetal, a Virginia-based company established in 2009, has a history of engaging in patent litigation to protect its intellectual property.

It includes a notable case against Cisco Systems that initially resulted in a $1.9 billion award for Centripetal, which was later overturned.

Another lawsuit against Keysight Technologies ended in a settlement involving a multiyear licensing agreement.

The increase in patent litigation within the burgeoning cybersecurity sector reflects the industry's growth and profitability.

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More than 1,400 cybersecurity-related patent applications have been filed globally since 2019.

Forrester Research’s Jeff Pollard noted the prevalence of common engineering principles in cybersecurity products complicates these disputes.

He said it often leads to standard network device features being contested.

While the court has not mandated Palo Alto Networks to modify its products, the company might need to update its software to avoid future infringement.

According to Pollard, such adjustments would primarily pose engineering and financial challenges rather than significantly impact customers.

Palo Alto is also facing infringement claims from Finjan and TaaSera.

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