Juniper, Palo Alto Settle Long-Standing Patent Dispute

The companies had spent more than two years in litigation over technology related to next-generation firewalls.

Juniper Palo Alto firewall patents

Juniper Networks and Palo Alto Networks have settled their long-running legal dispute over patents related to next-generation firewall technologies.

The two companies announced May 28 that after more than two years of litigation—including a trial earlier this year that ended in a mistrial—they have agreed to dismiss all patent legal issues pending in courts in California and Delaware. The resolution also includes Palo Alto making a one-time payment of $175 million to Juniper and an agreement by both vendors to cross-license the patents under dispute for the life of those patents and to not sue each other over patent infringement for eight years.

Palo Alto's payment does not come with an admission of any wrongdoing, according to officials.

Mitchell Gaynor, executive vice president and general counsel for Juniper, said the networking vendor's goal in initially filing suit against Palo Alto in 2011 was to protect the investment it had made in developing its security products.

"This settlement fully achieves those objectives, and we are very pleased with this resolution," Gaynor said in a statement.

Palo Alto officials said they were confident in the company's legal standing, but that after more than two years in litigation, it was time to move on and spend their money and efforts on innovation and technology rather than lawyers and court appearances.

"We do not believe that we infringe on any Juniper patents and we still believe this to be the case," Palo Alto CEO Mark McLaughlin said during a conference call with analysts and journalists to talk about the company's first-quarter financial numbers. "However, over the course of last two-and-a-half years, we’ve spent a large amount of time, money and other resources on this litigation. … We believe that this outcome will allow us to continue to focus our efforts in what we do best: Innovating and developing new products, servicing our customers and [seeing] the growth that results from that."

Juniper officials filed suit in 2011, alleging that technology used by Palo Alto in its next-generation firewalls and invented by the founders of Palo Alto infringed on patents that belong to Juniper. Nir Zuk and Yuming Mao worked on the next-generation firewall technology in question while executives at NetScreen. They brought the technology with them when Juniper bought NetScreen in 2004, then left Juniper in 2005 to form Palo Alto. Juniper officials alleged that Palo Alto infringed on seven patents that were developed by NetScreen and that were inherited by Juniper when it bought the company.

Palo Alto had countersued Juniper.

Palo Alto's McLaughlin said the settlement will not have an impact on the company's product plans—"Our roadmap is fairly well set right now for the next 12 to 18 months"—and that despite the high profile of the legal dispute, there was little negative impact to the vendor's business.

"It doesn’t appear that we really had any impact from a selling perspective from those litigations," he said. "The bottoms-up feedback from the field is this has not been a significant issue from going to market. The numbers wouldn’t suggest it is, either."