The legal battle between Cisco and Arista is heating up as the two sides square off again in court this week in a hearing about their technology patent infringement and enforcement case.
This hearing is the latest round in an ongoing battle that began in 2014. Most recently, in January the U.S. Customs and Border Protection (CBP) agency revoked its November 2016 finding that Arista’s redesigned products don’t infringe a key Cisco patent -- as a result Cisco called on Arista to stop importing those products and recall others sold with redesigned software.
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In the summer of 2016 the US Trade Representative began an import ban as well as a cease and desist order covering Arista products imposed by the International Trade Commission in June where it ruled that Arista had infringed on a number of Cisco’s technology patents.
Of the hearing this week Mark Chandler, Senior Vice President, General Counsel and Secretary of Cisco wrote in his blog:
“While Arista claims to have redesigned its products to avoid Cisco’s SysDB patent, they declined to present the redesign to the Commission for review. The ITC now will determine in the enforcement proceeding whether Arista’s redesign continues to infringe Cisco’s SysDB patent and, if so, what the penalty should be for the ongoing infringement."
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"We appreciate the staff attorney’s positions presented in opening statements today, which highlight issues to be considered in the enforcement proceeding. Our goal all along has been to stop Arista from using IP copied from Cisco in its products. We believe that the changes made in Arista’s redesign were insignificant, and that their switches continue to rely on the teaching of Cisco’s patent for the operation of their switches. We intend to present evidence to that effect in the enforcement proceeding.”
Chandler went on to write: “Customs and Border Protection (CBP) met with counsel from both parties in February, during which Cisco expressed our concerns about the Arista redesign. CBP is expected to issue a ruling on whether Arista should be allowed to import its redesigned product while the ITC enforcement proceedings are underway, but will be bound by the final ITC decision in September. If the ITC finds that Arista’s redesign still infringes after considering all the evidence, CBP will enforce the import ban of Arista’s products, and the ITC may issue substantial penalties for Arista’s continued sale of infringing products after the ITC cease and desist order went into effect.”
Arista didn’t commented on Chandler’s current remarks, but there was this news today about the case:
On April 4, 2017, the ITC staff attorney assigned to the enforcement action announced the Office of Unfair Import Investigation’s (“OUII”) position on the merits. OUII serves as a neutral third party representing the interests of the public in ITC investigations. OUII takes the position that Arista’s redesigned products do not infringe the ’537 patent, that Arista has fully complied with the ITC’s orders, and that Arista acted in good faith in doing so. Both parties will participate in a hearing for this matter on April 5, 2017.The ALJ’s initial determination on this matter is expected on June 20, 2017, and the ITC’s final determination is expected on September 20, 2017.
In February on its 4Q earnings call Jayshree Ullal, CEO of Arista said of the lawsuit: “Regarding customs, late evening on Friday, January 13, 2017, we were surprised to receive a letter from Customs and Border Protection, CBP, that revoked its previously issued 177 ruling on November 18, 2016. It is important to emphasize that CBP has not ruled that Arista's products infringe. CBP currently have no stated position on that issue. Instead, CBP has set up a process to obtain input from both parties before issuing a new ruling. We do look forward to cooperating with customs in forthcoming weeks. We are in inter-party process to resolve the matter. Arista is firmly resolute and steadfast in lawful supply of our products and servicing them without disruption to our customers. As a reminder, the ITC and customs orders do not prohibit us from selling non-infringing products manufactured in the domestic USA.”
[For a full read of Arista’s Q4 statements, see Seeking Alpha’s transcript here].
In January Arista said “It is important to understand that CBP has not ruled that Arista’s products infringe. Instead, CBP has expressed concern that its original ruling was incorrect, based on input provided by Cisco. It is equally important to understand that Arista has not yet responded to Cisco’s arguments and has not yet had an opportunity to address any concerns Customs may have as a result of those arguments. We look forward to engaging with CBP in the coming days, and we are confident that CBP will diligently and carefully evaluate the facts, as they have done throughout this process.”
Cisco began its legal proceedings on December 19, 2014 by filing two lawsuits against Arista. One suit is for patent infringement, which charges Arista with violating 14 Cisco patents for 12 features in the Arista EOS operating system. The second suit is for extensive copying of Cisco’s user manuals and command line structures, right down to the grammatical errors within them, Network World wrote at the time.