Legal Alpha

Long/short equity, special situations, momentum, contrarian
Legal Alpha
Long/short equity, special situations, momentum, contrarian
Contributor since: 2014
Great job. A lot of work went into preparing this article, which is thoughtful and thorough. The litigation bertween ANET and CSCO at the ITC -- where ANET is the defendant in two separate patent infringement suits filed by CSCO -- is the biggest legal overhang on the company. ANET has challenged the validity of these CSCO patents at the PTO where ANET has filed petitions for Inter Partes Review (of these CSCO patents) under the America Invents Act. The ITC cases will be decided first, before the PTO can issue final decisions on the merits of ANETs IPR petitions. That creates some risk for ANET, given that the penalty for infringement at the ITC is an exclusionary order, enjoining or banning the importation of the accused products. On the other hand, the market may "look through" the litigation and place greater value on ANETs strong fundamentals in a growing market.
Tough loss for PCO. The trade was worth a shot, given the asymmetry.
PCO will try and vacate the GOOG verdict in a post-trial motion, arguing that no reasonable jury could find non-infringement, given the GOOG memo that said the usage rights were "tied and bound" to the content. Think this motion is a long-shot. Courts are generally unwilling to set-aside jury verdicts if there is any -- any -- evidence to support the verdict.
After-market Friday, PCO was trading 50 cents.
PCO needs to make a transformative acquisition to monetize its NOL. That has to be the next step here -- or the stock does nothing.
Will be able to answer that more clearly closer to Friday.
Agree tut666 -- thank you for your feedback; much appreciative. I am heading out to Marshall federal court now and will post updates on the trial, as need be.
The trial will likely conclude this week, with closing arguments tomorrow. At that point, the jury will begin deliberations.
Excellent summation. Query: Dr Rubin based his opinion of infringement in part on the deposition testimony of Palo Alto co-founders Zuk and Mao -- will the jury see the relevant portions of the deposition testimony? Any idea what Zuk and Mao said?
Terrific analysis, Dan. Spot-on in every respect. I am sitting two rows behind you and concur wholeheartedly in your summation.
From FireEye's website:
"The FireEye Threat Prevention Platform supplements traditional and next-generation firewalls, IPS, AV, and gateways, whose signatures and heuristics cannot stop this new generation of threats."
Bottom Line: If Palo Alto is enjoined from selling its technology, competitors such as FireEye will benefit, and expand market share by grabbing Palo Alto customers with enhanced technology offerings.