Juniper’s Patent Case Against Palo Alto Ends in Mistrial

Juniper Networks Inc.’s infringement case against Palo Alto Networks Inc. resulted in a mistrial when a jury failed to reach a decision on all three of the disputed patents. Palo Alto shares rose as much as 13 percent.

Juniper, which provides security software to prevent unauthorized computer intrusions, sued Palo Alto in 2011. A jury in federal court in Wilmington, Delaware, deliberated about six hours today following a two-week trial before telling U.S. District Judge Sue L. Robinson that they couldn’t agree on the third patent. Robinson then dismissed the jury.

“While we wish this jury had been able to reach a unanimous conclusion, we look forward to presenting our case to a new jury in the near future,” Juniper said in an e-mailed statement.

Palo Alto rose $7.67, or 11 percent, to $77.12 today in New York trading, after climbing as high at $78.59. Juniper fell 18 cents to $26.26.

“We continue to stand by our position that we do not infringe on their patents and are committed to delivering innovation and providing the network security market with disruptive technologies,” Mark McLaughlin, chief executive officer of Palo Alto, said in a statement.

Juniper Employees

Palo Alto, founded by former Juniper employees and based in Santa Clara, California, “will continue to harm Juniper’s interests” unless its unauthorized use of the patented technology is stopped, Juniper said in the complaint.

Juniper, based in Sunnyvale, California, had agreed to discuss a settlement if Palo Alto was found to have infringed, Robinson said in an order yesterday.

Juniper, under pressure from hedge funds Elliott Management Corp. and Jana Partners LLC, said last month it would return at least $3 billion to shareholders and cut $160 million in expenses.

The case is Juniper Networks Inc. v. Palo Alto Networks Inc., 11-cv-01258, U.S. District Court, District of Delaware (Wilmington).

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