Update: The International Trade Commission on July 20 refused to set aside a ban on the importation of particular Ethernet switch products from Arista that the commission had found violated two Cisco patents. Marc Taxay, senior vice president and general counsel for Arista, said in a statement that company executives are "deeply disappointed" in the decision, particularly in light of the U.S. Patent Trial and Appeals Board's decision in May that the two Cisco patents at issue were invalid, and that Arista will file an appeal to the Federal Circuit Court of Appeals seeking an immediate stay of the ITC's orders.
"This represents an unfortunate departure from precedent and from the core premise of the America Invents Act and its inter partes review proceedings," Taxay said, adding that if the ITC's decision is sustained, Arista will release "modified products to ensure the supply of our products to our customers in full compliance with the ITC's orders."
Cisco Systems has won a significant victory in its legal battle with Arista Networks, since its smaller rival agreed to suspend imports of some of its network switching products. However, it’s unclear how long that suspension will remain in place.
The International Trade Commission (ITC) in May ruled that Arista’s Ethernet switches violated two of six Cisco patents and ordered that the company stop shipping those products into the United States. However, the regulatory board allowed a 60-day “Presidential review period” during which Arista could continue importing the switches.
In a filing this week with the Securities and Exchange Commission (SEC), Arista officials announced that the 60-day period had ended without a change in the order and that it was no longer importing the switches.
Mark Chandler, senior vice president, general counsel and secretary at Cisco, applauded the decision by the U.S. Trade Representative and the White House to refuse Arista’s request to stop the ITC’s import ban, saying that the ITC was correct in its initial ruling and that Arista should not be allowed to sell products that infringe on Cisco’s patents.
“The right solution, as we’ve emphasized from the beginning, is for Arista to stop using technology they copied from Cisco,” Chandler wrote in a post on the company blog.
However, the legal wrangling is not over. The U.S. Patent Trial and Appeal Board (PTAB) at one point in the years-long dispute invalidated the two patents noted in the ITC order, and Arista officials have filed emergency motions asking the ITC to suspend its orders.
The ITC is still considering those motions and a ruling in its favor would enable Arista to resume importing and selling the Ethernet switches as the appeals of the PTO rulings make their way through the process with the Federal Circuit Court of Appeals.
The patent dispute began in December 2014 when Cisco asked the ITC to block Arista from selling products that violated some of its patents. Arista later countersued Cisco and argued that the networking hardware giant was using the courts and regulatory processes to tamp down the competitive threat that the fast-growing Arista represented to its dominant position in the market.
An issue in the case is the large number of former Cisco employees who work and had worked at Arista. Those include Arista President and CEO Jayshree Ullal, Arista founder and Chief Development Officer Andy Bechtolsheim, Kenneth Duda, founder, CTO and senior vice president of software engineering, and Anshul Sadana, chief customer officer. Cisco officials claim that the patents at issue were either patented by former Cisco people who now work at Arista or by people at Cisco who had worked with those now at Arista.
In the SEC filing, Arista officials said they have been modifying its switching products to address the issues raised in the ITC’s order and that if the regulatory board doesn’t suspend its orders, “Arista intends to release these modified products as soon as practicable and work with customers on their qualification and deployment. Arista will also seek appropriate regulatory approvals for these modified products.”