Juniper Settles with Palo Alto for $175 Million

Networking vendors Juniper Networks and Palo Alto Networks have settled a long-running legal dispute in an out-of-court agreement.

By Sean Michael Kerner | Posted May 28, 2014
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Networking vendors Juniper Networks and Palo Alto Networks have settled a long-running legal dispute in an out-of-court agreement.

As part of the settlement, Palo Alto will pay Juniper Networks $75 million in cash and $100 million in stock. The two companies have also pledged to dismiss all patent litigation pending as a result of the settlement.

"Juniper Networks initiated this litigation in order to protect our intellectual property and investment in innovation that is reflected in our leading security products," Mitchell Gaynor, executive vice president and general counsel of Juniper Networks, said in a statement. "This settlement fully achieves those objectives, and we are very pleased with this resolution."

Palo Alto's President and CEO, Mark McLaughlin, also noted that he is pleased to put the legal battle behind him.

"While we are confident of our position in the case, we believe this outcome is in the best long-term interest of our shareholders and customers as it allows us to further focus our efforts on what we do best: innovating, growing the business and solving the toughest cybersecurity problems for our customers."

News of the settlement with Juniper comes as Palo Alto reported its third quarter fiscal 2014 earnings results. For the quarter, Palo Alto reported revenue of $150.7 million for a 49 percent year-over-year gain.

Juniper and Palo Alto first began their legal battle over networking patents in 2011. Juniper had alleged that Palo Alto infringed on six of its patents, including U.S. Patents #8,077,723;7,779,459;7,650,634;7,302,700;7,093,280 and 6,772,346.

Palo Alto was founded by former Juniper employees Nir Zuk and Yuming Mao. Juniper alleged that the former employees took Juniper's intellectual property.

A Summary Judgement in the case was handed down on February 6 of this year.

"The judge granted Juniper's motion for summary judgment on assignor estoppel on all asserted patents," Juniper stated in February. "The significance of that ruling is that Palo Alto Networks (PAN) will not be able to claim that the patents are invalid."

A mistrial was declared on March 4 in the case, leaving the patent litigation unsettled until today.

Sean Michael Kerner is a senior editor at Enterprise Networking Planet and InternetNews.com. Follow him on Twitter @TechJournalist.

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