Cisco (NASDAQ:CSCO) Tastes a Little Victory against Arista (NYSE:ANET)

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Cisco Systems, Inc. (NASDAQ:CSCO)

The International Trade Commission (ITC) has handed down a ruling in favor of Cisco Systems, Inc. (NASDAQ:CSCO) in the patents case against its rival Arista Networks Inc (NYSE:ANET). The judge ruled that the latter violated at least three patents. The ruling comes after a long investigation with supporting evidence, and a fortnight of testimony and the cross-examination.

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In a blog post, Cisco Systems’ Mark Chandler said that the ruling puts an end to Arista’s systematic copying of its intellectual property rights. He said that its rival could no longer support claims to resellers, the market, and customers that Arista has developed. He pointed out that the patents in question related to Arista’s core products. The executive said that one of the patents that were found to have been infringed covered its proprietary, SysDB, which Arista claimed as a ‘secret sauce’.

Chandler indicated that none of the patents, including NetDB, were adopted as industry standards. He claimed that the patents for which it was fighting against were invented by its employees who later became the executives of Arista Networks. Alternatively, the patents were taken by those engineers who worked in Cisco and later joined its rival.

Arista’s Options

The Cisco executive listed four options for its rival. One was to withdraw the products from the market, which he considered the most honorable option. The second was to modify the products so that they don’t infringe on Cisco’s patents. He said that Arista had the option of submitting fresh designs during the investigation of the ITC. However, Arista failed to do so.

The third option suggested by Cisco Systems was to face an exclusion order. Chandler said that Arista could not ignore such an order as that would result in more sanctions. That included a possible permanent injunction against the sale of Arista’s products in the US. The last option was to evade the ITC exclusion order.

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