Arista Sues Cisco Alleging Antitrust Violations

The company is claiming Cisco is using its dominant position in the networking space to harm competition by suing rivals and punishing customers.

Arista CEO

The legal dispute between Cisco Systems and Arista Networks is ramping up now that Arista officials are suing the company's larger rival for alleged antitrust violations aimed at hindering competition.

Arista officials filed the lawsuit Jan. 25 in U.S. District Court in Northern California, accusing Cisco of monopolistic business practices that unfairly harms both competing vendors and end users. The lawsuit comes two days before the International Trade Commission (ITC) is expected to announce a decision regarding the five patent infringement complaints filed by Cisco against Arista in December 2014. That decision is expected Jan. 27.

Arista's antitrust allegations are part of the company's response to Cisco's patent infringement case and came about as a result of evidence uncovered during the discovery part of the legal proceedings, Arista officials said in the complaint.

In their lawsuit, Arista officials allege that Cisco looked to unfairly undermine rivals in the competitive networking space by claiming patent infringement on its command-line interface (CLI) that Cisco previously had touted as industry-standard. In addition, Arista is alleging that Cisco is punishing customers who used networking products from other vendors.

"Taken together, Cisco's conduct harms consumers and stifles more innovative and efficient technology, and recently discovered Cisco documents demonstrate that its conduct was part of a deliberate scheme to harm competition," the Arista officials wrote in the complaint.

Mark Chandler, senior vice president, general counsel and secretary at Cisco, called Arista's complaints "bogus" and said they are an effort to take attention away from the upcoming ITC decision and to "muddy a District Court trial scheduled for November."

"Let me be clear," Chandler wrote in a post on the company blog. "We welcome the opportunity to show that Cisco's business practices are consistent with a highly competitive and vibrant industry. We seek only fair competition, but will take action against those who misappropriate our technology and use it to compete against us."

The CLI is at the core of both Cisco's complaints against Arista and Arista's countersuit against Cisco. Cisco officials claim that many of the features in Arista's EOS network operating system were patented by former Cisco employees who now work at Arista. Many top executives at the 11-year-old Arista—including CEO Jayshree Ullal (pictured)—are former Cisco employees. Arista officials have pushed back at the allegations, claiming that EOS was built from the ground up and that Cisco's lawsuit is essentially a threatened giant lashing out at competitors.

Other networking vendors, such as Hewlett Packard Enterprise and Juniper Networks, copy a small amount of commands for their products, Cisco has claimed. However, the company says that in its EOS, Arista copied 550 commands from the CLI.

In their antitrust lawsuit, Arista officials are focusing on two areas, the first of which involves the CLI. They claim that in the years before Arista was launched and Cisco was even more dominant in the networking space, the larger company claimed that the CLI used in its own IOS operating system was "industry standard" and that Cisco officials knew that Arista and other vendors used those commands as well to make it easier for network administrators who had learned them over the years.

However, as Arista grew and became a potent competitor, Cisco officials changed their message and began claiming copyright protection over the CLI in an effort to hinder competition.

In addition, Cisco also is now penalizing customers through its SMARTnet maintenance and service contracts if they opt to use hardware from a competitor. "These penalties far exceed any additional cost for Cisco and are so onerous that they render associated price of equipment sales below cost," Arista officials wrote in the complaint.