Cisco Notches Key Victory Against Arista in Patent Dispute

The ITC rules that Arista infringes on three of Cisco's networking patents and orders an import ban of some Arista switch and component products.

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Cisco Systems won the latest round in its ongoing legal dispute with rival Arista Networks when U.S. trade regulators ruled that Arista infringed on three Cisco patents by using certain features in its Ethernet switches and recommended a limited import ban on Arista products that include those features.

The International Trade Commission (ITC) on June 23 upheld the findings of a single ITC administrative judge in February that found that certain Arista technologies infringed on three of five patents that Cisco officials initially said were violated. The ban on imports of Arista products will focus on those switches and components that use the technologies that infringed on the patents.

The next step is to have the ITC decision reviewed by the U.S. trade representative to see if the regulatory body's ruling and decisions will be upheld.

The decision is the latest step in a wide-ranging legal battle between Cisco and Arista, a fast-growing rival in the networking space that was founded and is being run by a large number of ex-Cisco executives, including CEO Jayshree Ullal. Cisco officials have claimed that Arista is building its business by using technologies developed by Cisco; Arista executives have argued that Cisco's legal push has less to do with protecting patents and more with using its size and financial strength to drive away an emerging competitor.

Cisco executives said the ITC ruling was a definitive victory for the company.

"This marks the end of Arista's ability to mislead its shareholders and customers about the infringing nature of their products," Mark Chandler, senior vice president, general counsel and secretary at Cisco, wrote in a post on the company blog. "The ITC remedies include an exclusion order, which would ban all Arista switches and their components from importation into the U.S., and a cease and desist blocking them from building infringing products in the U.S. that are comprised of any imported components."

Chandler also warned Arista that an attempt to address the ITC ban by having the products and components made in the United States would put their customers and any participating manufacturing partners at risk of further legal problems.

"Encouraging contract manufacturers to circumvent these federal rulings by assembling infringing Arista switches using imported components will expose these manufacturers to claims of willful patent infringement in federal court," he wrote. "Such actions not only would violate the ITC orders, but the federal court has the authority to enjoin local manufacturing of infringing products."

Arista also can seek a stay of the import ban by a federal court.

Marc Taxay, senior vice president and general counsel for Arista, said in a statement that the company will comply fully with the ITC orders, and Arista officials said that the company has already released a version of its EOS networking operating system that comes with "design-arounds" that address the ITC's findings. The company will seek regulatory approval for these design-arounds, they said.

However, Taxay decried what he said is Cisco's efforts to use the courts to protect its dominant market share.

"Despite Cisco's rhetoric claiming that the lawsuits are a defensive move to protect its intellectual property, these actions are clearly part of a broader effort to use litigation to preserve Cisco's market position," he said. "If allowed to succeed, Cisco's scheme would have a chilling effect on innovation. While we will defend our rights in these actions, our primary focus remains on the continued supply of products to our customers."

The legal battle between the two companies goes back to December 2014, when Cisco filed two lawsuits in federal court claiming patent and copyright infringements and alleging Arista is using 12 Cisco features covered by 14 patents in its own products. Two weeks later, Cisco asked the ITC to ban Arista from selling or importing any of the disputed products.

Cisco officials have argued that all the patents at issue were either invented by Cisco employees who became Arista executives or by engineers who worked for those Arista officials when they were employed at Cisco. The three patents at the center of the ITC investigation involved private virtual LANs and SysDB for managing configuration data.

However, the ITC's decision does not end the litigation between Cisco and Arista. There is another patent-infringement claim by Cisco working its way through ITC channels that officials said they expect to be ruled on in August. In addition, there are still the lawsuits filed with the federal courts by the companies against each other that still need to be settled.