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."
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.)