Arista Barred From Importing Switches to US
In yet another twist in the three-year battle over patent infringement, Arista announced on Wednesday that it would stop importing some of its Ethernet switches into the US to comply with an order from the International Trade Commission (ITC).
The fact that Arista had to comply with the ruling is a significant victory for Cisco, which first brought the patent infringement complaint against the company in 2014. However, as with many other aspects of this case, a final verdict is not expected for some time, giving the two companies more time to maneuver their legal cases.
In a July 5 filing with the US Securities and Exchange Commission, Arista noted the ITC ruled on May 5, 2017 that the company did not violate four of the six patents that Cisco is asserting. The commission did find that Arista infringed on two of the patents but said the company could still important these products into the US during a 60-day "Presidential" review period.
That review period ended on Wednesday and since appeals are still pending, Arista was forced to stop the imports.
"Because the United States Trade Representative did not disapprove the ITC's final determination, the limited exclusion order and cease and desist order (the "ITC Orders") are now in full effect, and Arista is barred from importing and selling infringing covered products in the United States," the SEC filing reads.
In the meantime, Arista is awaiting the results of emergency motions filed with the ITC in May and June seeking suspension of the ITC orders. The motions follow the Patent Trial and Appeal Board's (PTAB) invalidation of all the patent claims implicated in the orders. The ITC's rulings on these motions, which could come soon, could result in a suspension of the import ban placed on Arista until the completion of any appeals of the PTAB decisions.
"While the presidential review period for the 945 Investigation has ended, we are still awaiting the International Trade Commission's decision on our motion to suspend its remedial orders, which are based on patent claims that the Patent Trial and Appeal Board has found invalid," Marc Taxay, senior vice president and general counsel at Arista, wrote in a statement.
With another long appeals process ahead of it, Arista is now in the process of revising several of its switching products and creating workarounds for the patents.
"If the ITC does not suspend the ITC Orders, Arista intends to release these modified products as soon as practicable and work with customers on their qualification and deployment. Arista will also seek appropriate regulatory approvals for these modified products," according to the filing.
On Cisco's side, General Counsel Mark Chandler noted in a blog post that even the ITC ban doesn't go far enough to satisfy the company.
"The right solution, as we've emphasized from the beginning, is for Arista to stop using technology they copied from Cisco," Chandler wrote, noting that Arista and Cisco can still appeal in federal court.
The bad blood between the two companies stems from the fact that several Cisco executives moved to Arista after the company started, including co-founder and board chairman Andy Bechtolsheim and CEO Jayshree Ullal. Cisco claims a number of technologies that Arista uses were originally created and designed at the company and these patents still belong to Cisco.
In December, Cisco lost a significant court case when a jury found that Arista owed the company no compensation. It was at this time that the ITC ruled Arista has infringed on the two disputed patents. (See Arista Wins Big in Ongoing Cisco Court Battle.)
Ultimately, Arista is putting its faith in the US Patent and Trademark Office to end the dispute, and the company has appeals pending there.
However, Cisco is not sitting still and, as ECN editor Mitch Wagner reported last month, Cisco is working with Microsoft -- a significant Arista customer -- to bring white box flexibility to traditional networking gear, which could displace other types of switches in the data center as Redmond continues to build out its public cloud abilities. (See Cisco & Microsoft Are Collaborating: Arista Should Be Worried.)(Editor's Note: This article was updated with a comment from Arista.) Related posts:
- Cisco Makes 'Intuitive' Bet to Reconquer Networks
- Arista Passes $1B in Sales
- Arista Blooms, but Customers Feel Unfulfilled
— Scott Ferguson, Editor, Enterprise Cloud News. Follow him on Twitter @sferguson_LR.