Centripetal Networks, LLC v. Palo Alto Networks, Inc
Authored by: Jeremy J. Gustrowsky
In a recent decision, the Federal Circuit vacated a Patent Trial and Appeal Board (PTAB) ruling in the dispute between Centripetal Networks, LLC and Palo Alto Networks, Inc., Cisco Systems, Inc., and Keysight Technologies, Inc. The case centered on U.S. Patent No. 9,917,856, which covers methods for detecting network threats in encrypted communications. While the PTAB had previously found the patent claims unpatentable as obvious, the Federal Circuit found fault with how the Board handled evidence that Cisco may have copied Centripetal’s technology.
A key issue in the appeal was whether an administrative patent judge (APJ) should have recused himself due to owning a small amount of Cisco stock. Centripetal argued that this created a conflict of interest, especially after Cisco joined the proceeding. However, the court found that the APJ’s stock holdings were below the $15,000 threshold set by federal ethics regulations, and that Centripetal waited too long—over three months after learning of the potential conflict—to raise the issue. As a result, the court held that the recusal motion was untimely and that there was no violation of ethics rules or due process.
The real turning point in the case, however, was the Board’s failure to consider specific evidence of copying by Cisco. Centripetal had introduced testimony and documents suggesting that Cisco had access to and may have intentionally copied the patented technology. The Federal Circuit made clear that when considering whether a patent is obvious, the PTAB must fully evaluate all evidence of so-called “secondary considerations,” such as copying, that may show the invention was not obvious. The Board’s statement that it was “not in a position to evaluate” the copying evidence was not enough.
As a result, the Federal Circuit vacated the PTAB’s decision and sent the case back for further proceedings, instructing the Board to properly consider the evidence of copying. The court also suggested that a new panel of APJs may be appropriate on remand. This decision underscores the importance of thorough review of all relevant evidence in patent challenges, especially when issues of copying are raised.