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Palo Alto Networks to Pay Juniper $175 Million in Cash, Equity to Settle Patent Case

29
May
2014

Juniper Networks to Receive $175 Million in Cash and Equity from Palo Alto Networks

Juniper Networks and rival network security firm Palo Alto Networks have entered into a settlement agreement resolving patent litigation between the two companies that started when Juniper Networks filed a lawsuit against Palo Alto Networks in December 2011.

In what was a long, drawn-out legal battle, Juniper’s lawsuit alleged that Palo Alto Networks’ appliances infringed on several of its patents.

Palo Alto Networks founders Nir Zuk and Yuming Mao are the named inventors of the patents that were asserted against the company, as both Mao and Zuk were employed by NetScreen Technologies, which was acquired by Juniper in April 2004. Zuk left Juniper and founded Palo Alto Networks in 2005 and was joined by Mao in 2006.

Under the terms of the settlement, Palo Alto Networks will make a one-time payment to Juniper Networks of $75 million in cash, approximately $70 million in shares of common stock and a warrant to purchase approximately $30 million of common stock.

As a result of the settlement, Juniper Networks and Palo Alto Networks will dismiss all patent litigation pending in Delaware and California,and will license the patents at issue in all outstanding suits to each other for the life of the patents.

The two companies have also agreeed not to sue each other for patent infringement for eight years.

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

“We have reached a settlement with Juniper and are pleased to put this behind us,” Mark McLaughlin, president and chief executive officer of Palo Alto Networks, said in a statement provided to SecurityWeek. “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.”

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Managing Editor, SecurityWeek.Previous Columns by Mike Lennon:Palo Alto Networks to Pay Juniper $175 Million in Cash, Equity to Settle Patent CaseKaspersky Lab Advised Maker of Hacker-Themed Video Game Watch DogsThreat Intelligence Services Spending to Top $1.4 Billion by 2018: IDCCloud Hosting Firm FireHost Names New CSODistil Networks Raises $10 Million to Battle Malicious Bots

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