Cisco Systems won a key battle in its patent infringement lawsuit against Arista Networks on Thursday US time, as the International Trade Commission ruled that Arista networking switches infringed on three of the five patents at issue in the case.
The ITC, as it did in an earlier ruling on the case in February, is recommending a ban on imports of Arista switches and components containing the infringing technology, along with a halt to sales, marketing and distribution of the products in the US. Those measures are set to take effect in August.
Arista shares fell nearly 4 percent to US$71 in after-hours trading, while Cisco shares were unchanged.
Cisco claims Arista violated two of its patents covering private VLAN network security, and one patent covering its core SysDB technology, which Arista uses in its EOS networking operating system.
“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 and general counsel at Cisco, said in a blog post.
Cisco filed its lawsuit against Arista in December 2014, alleging that the networking startup had infringed on its patents and also stolen copyrighted materials.
Cisco also alleges that Arista president and CEO Jayshree Ullal - who was previously senior vice president of Cisco's data centre switching business - is illegally using 12 separate Cisco switching features covered by 14 different US patents.
In a press release, Arista tried to accentuate the positive by noting the ITC ruled that it didn’t violate two of the five Cisco patents at issue in the case. Arista has released a redesigned version of EOS that it claims does not violate Cisco’s patents. In the press release, Arista said it plans to submit the software for regulatory approval.
"Arista respects the Commission’s decision and intends to fully comply with the orders," Marc Taxay, senior vice president and general counsel at Arista, said in the press release.
But Taxay also said Arista believes Cisco's patent lawsuit is primarily motivated by competitive concerns.
"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," he said in the statement.
The US Trade Representative will now review the ITC’s ruling on the Cisco-Arista case and decide whether to implement the important and sales bans. However, there’s lots more to come in this legal battle.
Chandler said in the blog post that Cisco is expecting the ITC to rule in August on two more technology patents it claims Arista has infringed upon.
Arista, Chandler said, will also face trial in November on the patent and copyright infringement case around Cisco’s proprietary command line interface.