Data Center Infrastructure

Judge Favors Arista in Co-Founder Lawsuit

A California Superior Court judge has ruled in favor of Arista in an important intellectual property lawsuit filed by one of the company's co-founders, who is also its biggest stockholder.

In a preliminary ruling dated Wednesday, Judge Peter H. Kirwan, Superior Court of California, County of Santa Clara, rejected a claim by OptumSoft Inc. , a company founded by Arista co-founder David Cheriton, that OptumSoft owns the intellectual property behind key Arista Networks Inc. software. (See Arista Faces Legal Challenge as It Files for $200M IPO .)

Specifically, OptumSoft claimed to own Smash, software integral to high-performance routing and switching, used by Arista's major financial services, web and other big customers.

OptumSoft also claimed to own Sysdb, used for coordinating processes within a networking system.

Both Smash and Sysdb work with TACC, a programming language, compiler and runtime framework owned by Optumsoft and licensed to Arista within days of Arista's founding in 2004. (Arista was called "Arastra" then.)

Ownership of TACC wasn't disputed; it belongs to OptumSoft. Arista had a perpetual, non-revocable and non-exclusive license to TACC, which also gives OptumSoft ownership of improvements to TACC made by Arista. And that's the crux of the dispute: Optumsoft claims Smash and Sysdb were improvements to TACC and therefore belong to OptumSoft. Arista disagreed, and Kirwan sided with Arista in his preliminary ruling.

Kirwan wrote: "Had Dr. Cheriton wanted the scope of the ownership provision to include software written by Arista that would aid in the development of programs with TACC or would be useful to TACC programmers, it should have been clearly and explicitly set forth in the language of the Agreement."

Find out more about key developments related to the systems and technologies deployed in data centers on Light Reading's data center infrastructure channel

Adding a weird wrinkle to the lawsuit, Cheriton is Arista's largest shareholder. More precisely, "The 2010 David R Cheriton Irrevocable Trust dtd July 27 2010" owns 21.71% of the total shares of Arista.

Not surprisingly, Arista said in an emailed statement that it was "pleased" with the decision. OptumSoft hasn't responded yet to a request for comment.

Arista still has another big intellectual property lawsuit pending: Cisco Systems Inc. (Nasdaq: CSCO) sued Arista in December 2014 charging "repeated and pervasive copying of key inventions in Cisco products," including Cisco's implementation of the command line interface. That lawsuit is grinding on in multiple jurisdictions, and is unlikely to be resolved soon. (See Cisco Slams Arista With Massive Patent & Copyright Suit.)

— Mitch Wagner, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profileFollow me on Facebook, West Coast Bureau Chief, Light Reading. Got a tip about SDN or NFV? Send it to [email protected]

Mitch Wagner 12/28/2015 | 10:32:09 AM
Re: Optumsoft It seems to be a fight mainly over ownership of code. If Optumsoft owns Arista's work in additon to its own, Optumsoft can make money licensing it to third parties. Of course, then Optumsoft hurts Arista -- which Cheriton also has a strong financial incentive to keep thriving. 

It's safe to say that he and the other founders of Arista had a falling-out. This may be a case of cutting off your nose to spite your face. 
MikeP688 12/27/2015 | 1:53:10 AM
Re: Optumsoft Sometimes standing up for one's principle is challenging--and people pay a very heavy price for it.    Let's hope that standing up for principles does not become "outworn".

Joe Stanganelli 12/24/2015 | 7:25:34 PM
Re: Optumsoft @Mitch: But isn't that money simply being transferred from the one company where he has 22 or 24% ownership to another where he has greater interest?  Perhaps that licensing cost/revenue will be more valuable to him at Optumsoft?
Joe Stanganelli 12/24/2015 | 7:22:42 PM
Re: Optumsoft @MikeP: Based on what I've read about him, it seems to be a simple "matter of principle" for the guy, and that he truly believes that Arista is wronging Optumsoft.  He seems to be very much an engineer stereotype.
Mitch Wagner 12/21/2015 | 10:20:47 AM
Re: Optumsoft I don't know if he's suing himself on principle. He may believe he can get licensing revenue from Juniper or other companies, without harming his equity in Juniper. 

As for the case being ironclad, the judge pretty much blew that out of the order. But an appeals judge might feel differently, if Cheriton decides to appeal. 

It's clear there's bad blood between Cheriton and the other co-founders. 
MikeP688 12/21/2015 | 2:36:59 AM
Re: Optumsoft @Joe:  What, then, is the point here?   Lining up Lawyer's pockets?  
Joe Stanganelli 12/20/2015 | 4:41:10 PM
Optumsoft THe interesting thing about this lawsuit is that the owner of Optumsoft is also, via trust, the primary shareholder of Arista.  Cheriton is, in this sense, suing himself -- apparently on principle. This led many to speculate that the case must be pretty ironclad for Optumsoft.
danielcawrey 12/18/2015 | 4:35:10 PM
Copying A lot of companies copy Cisco and litigation is involved.

But this case between Arista and its co-founder smells of bad blood. It sounds to me like there were some licensing agreements in place but that the two sides decided to stop communicating.
Sign In