Brocade's $112 Million Victory over A10 Networks

Brocade Communications Systems Inc. (NASDAQ: BRCD) announced Monday that a San Jose federal court jury had found A10 Networks responsible for broad-based intellectual property infringement and unfair competition. Brocade was awarded approximately $112 million. Brocade sued A10 in 2010, claiming patent infringement, trade secret misappropriation and breach of contract, among other claims. The trial lasted three weeks.

The jury unanimously awarded punitive damages against A10 and against its CEO, Lee Chen, strongly condemning their unfair competition. The jury also returned an unambiguous verdict for patent and copyright infringement and trade secret misappropriation that covered A10’s entire AX Series load-balancing server products.

“Brocade is grateful for the jury’s service and close attention to the evidence. Brocade stands firm in its commitment to protect its intellectual property assets and our innovation,” said Tyler Wall, general counsel at Brocade. “While litigation is a last resort, in this case the jury plainly felt that it was warranted. We are pleased that jury agreed with us on our arguments and for handing us this major victory in court.”

San Jose-based Brocade Communications Systems engages in the supply of Internet protocol based Ethernet networking solutions and storage area networking solutions, and it has been called the poor man’s Cisco Systems Inc. (NASDAQ: CSCO) or Juniper Networks Inc. (NYSE: JNPR). It has a market cap of about $2.3 billion, compared to Cisco’s $89.4 billion. Brocade is trading near $5.26 in premarket trading, in a 52-week range of $3.21 to $6.17, while Cisco is near $16.81 and Juniper is at $18.63. Analysts polled by Thomson Reuters have a consensus price target on Brocade of $6.01.

Brocade with announced its fiscal third-quarter results Thursday, August 16, after the close of the markets.