The legal ping-pong battle between Cisco and Arista Thursday found Cisco on the winning side as In the International Trade Commission ruled that Arista switches infringe on two core Cisco patents that the company says are key technologies in its network switching pantheon.
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Mark Chandler, senior vice president, General Counsel and Secretary of Cisco wrote in a blog post of the Commission’s specific ruling that Arista was:
- In violation of U.S. Patent 6,377,577 (“Access Control List Processing In Hardware”)
- In violation of U.S. Patent 7,224,668 (“Control Plane Security and Traffic Flow Management”)
“Both of these patents cover core Cisco networking technology. The ‘577 patent, a named inventor of which is Arista chairman and founder, Andy Bechtolsheim, who presumably was aware of his own invention when designing Arista products, is a fundamental Cisco invention that improves processing in network devices,” Chandler said. “The ‘668 patent covers a core Cisco invention for improving network device security and helps, among other things, prevent denial of service attacks. Like our other patents that Arista was found to infringe, these inventions were developed by Cisco employees and remain critical to the cutting-edge products that we sell.”
Chandler wrote that “by confirming Administrative Law Judge McNamara’s Initial Determination, the Commission brings the total confirmed Arista patent violations to five. Today’s ruling in the “945 Investigation” concludes Commission review of the two cases brought by Cisco in December 2014,” Chandler stated. “The Commission’s decision is the latest of several findings that Arista has intentionally and unlawfully copied Cisco’s proprietary technology. As the Commission put it in its less-redacted version of the‘944 ruling, which was made public only two weeks ago, “Arista’s behavior evinces a corporate culture of copying,” and finding that at best, Arista was “willfully blind” to Cisco’s intellectual property. It is this culture of copying that Cisco has aimed at in its legal action.”
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Today’s ITC ruling also included a recommended remedy, which consists of an import ban and a cease and desist order, and that Arista pay a 5% bond on covered products sold or imported during a prescribed presidential review period. These affect all Arista switches. The burden is on Arista to demonstrate that any changes it makes to its products will be sufficient to avoid further infringement, Chandler stated. “Now begins the 60-day presidential review period for this case, which expires on July 4, 2017. At that time, barring a very unlikely intervention from the U.S. Trade Representative on behalf of the President, the new ITC orders will go into effect – banning the import, sale and distribution of Arista products in the U.S.”
The ruling was referred to during Arista’s Q1 2017 earnings announcement today.
In response to an analyst’s question about the findings, Marc Taxay, Arista vice president and general counsel stated: “There are two IPRs [Inter partes review — a procedure for challenging the validity of a United States patent before the United States Patent and Trademark Office ] that have been instituted on the ‘668 and the ‘577 patents, which were the patents that were found to have been infringed in the 945. There were hearings that were held at the PTAB [Patent Trial and Appeal Board] in March, and the final decisions by the PTAB will be issued by June 11. So from a timing standpoint, as you probably know, there’s a 60-day review period – presidential review period following the issuance of the final determination of the ITC. So that should come out to July 3, so the PTAB decisions will come out several weeks before that,” Taxay stated [A full transcript of the Arista call is available on the Seeking Alpha site here].
“At this stage, obviously, we’ve been evaluating our design-around strategy. We are obviously preparing that strategy in the event that we were to lose the IPRs. And as I said, we just received the final determination, so we have to go through the actual written opinion to see how that flows through. But certainly, our plan would be based upon our review of that. We have several different options that we’re evaluating, and we’ll have something together before the end of presidential review period,” Taxay stated.
The current ruling adds yet another twist to the ongoing patent and copyright infringement case between Cisco and Arista. In April Arista landed a significant win that let it once again import redesigned products to the US that have been under import embargo since January, the so-called ‘944 case.
Specifically, according to a post on Arista’s site, on “April 7, 2017, U.S. Customs and Border Protection (“CBP”) completed its review and once again ruled that Arista’s redesigned products do not infringe the ’592, ’145, or ’537 patents that were the subject of a limited exclusion order and cease and desist order issued by the United States International Trade Commission (ITC) in Investigation No. 337-TA-944 and that Arista may resume importing its redesigned products into the United States.”
The action surrounds a claim that Arista made that the software that runs its switching products –Extensible Operating System 4.16 and later– had been sufficiently redesigned to work around Cisco’s infringement claims.
The April 7 ruling follows the January 15, 2017 decision by CBP to revoke its November 18, 2016 ruling that our redesigned products do not infringe the ’145, ’592, and’537 patents. That revocation lead to those products being held back from import into the US. That ruling said current products which contain its redesigned EOS are not within the scope of the limited exclusion order and it could begin selling its product in the U.S. again.