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Juniper to Receive $175 Million in Cash and Equity in Patent Settlement with Palo Alto Networks

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Ending a lengthy battle over patents related to firewall technology, Juniper Networks and Palo Alto Networks have entered into a settlement agreement in which PAN will make a one-time payment to Juniper Networks of $75 million in cash and $100 million in shares of common stock and warrants to purchase common stock.

In late 2011, Juniper launched a lawsuit alleging that PAN products had infringed on six of Juniper’s patents, and Juniper later added another two infringements and removed one of the original patent complaints.

Juniper and PAN went to court in late February 2014, but a mistrial was declared March 4.

The out-of-court settlement this week (which sees PAN handing over $175 Million in cash and equity) means that all patent litigation pending in Delaware and California between Juniper Networks and Palo Alto Networks is now dismissed.

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

The settlement comes with it no admission of guilt – or innocence – so it remains unclear to courts and the public whether PAN did infringe on Juniper patents.

In recent years, tech companies have been actively pursuing those they believe are infringing on their intellectual property. For instance, TQP Development issued a lawsuit against Intel, Yelp and others for patent infringement for their use of SSL and transport layer security protocols.

At the same time, many of these companies have been accused of being so-called “patent trolls” that stifle innovation through lawsuits. Web host Rackspace recently won a lawsuit against an alleged patent troll and is counter-suing. The idea that diverting money away from technology development and job creation in the economy has led the White House to consider steps to curb abuse of patent lawsuits.

About the Author

David Hamilton is a Toronto-based technology journalist who has written for the National Post and other news outlets. He has covered the hosting industry internationally for the Web Host Industry Review with particular attention to innovative hosting solutions and the issues facing the industry. David is a graduate of Queen’s University and the Humber College School of Media Studies.

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