CSCO Cisco Systems Inc

By Don Clark 

A federal jury sided with Arista Networks Inc. in a closely watched copyright case brought by Cisco Systems Inc. against its upstart rival in the networking equipment market.

The San Jose, Calif., jury found that Arista wasn't liable for infringing a Cisco copyright and found that Arista didn't infringe a Cisco patent, representative of the companies said. Jurors awarded Cisco no damages.

At issue in the case was whether Arista was guilty of copyright infringement for adopting many of the same commands for configuring its hardware that Cisco developed for managing its own equipment. Cisco asserted that Arista could have used its own commands -- known in the industry as a command-line interface, or CLI -- but instead misappropriated more than 500 commands that Cisco copyrighted.

Arista argued that its actions were legal because Cisco's commands had evolved over the years into an industry standard that many companies and equipment users have adopted. Cisco, in response, presented evidence that other companies used a much narrower set of copyrighted commands.

The jury, while concluding that Arista did infringe Cisco's interface commands, also accepted Arista's argument that its actions were permissible under a legal doctrine called "scenes a faire." The French phrase relates to situations in which creative works are dictated by circumstance, as in cases where software needs to be compatible with technical standards or certain hardware.

Arista's stock rose 3% on the news.

Similar issues arose in a long-running copyright infringement case brought by Oracle Corp. against Alphabet Inc.'s Google unit. That case focused on application program interfaces, or APIs, computer code that helps programs, websites or apps talk to one another. A federal jury in May found that Google's use didn't infringe Oracle's intellectual property because it constituted fair use under copyright law.

A Cisco spokeswoman said in an emailed statement that it will review the details of the ruling and determine its options for post-trial motions or appeal. "We respectfully disagree with the verdict," she said.

Jayshree Ullal, Arista's chief executive, termed the verdict "a moral victory for the entire networking industry."

Cisco is the biggest maker of switching systems used to connect servers inside data centers and to the internet. But Arista, the chairman and chief executive of which are former Cisco executives, has grabbed a substantial chunk of the market since its founding in 2004.

The San Jose, Calif., networking giant first accused Arista of copyright and patent infringement in December 2014. A portion of the battle has recently been waged at the International Trade Commission, which can block import of products it finds to have infringed a U.S. company's patents.

Cisco last week persuaded an ITC administrative law judge that Arista infringed two of its patents. Arista said it would ask the full commission to review the ruling, which would likely result in a final determination in April.

The ITC this year ordered an import ban on Arista hardware in connection with separate patent infringement allegations brought by Cisco. Arista subsequently modified its products to exclude technology covered by Cisco's intellectual property.

Arista recently convinced U.S. Customs and Border Protection officials that modified versions of its products aren't covered by the import ban. Cisco is asking the ITC for an additional ruling to block the Arista imports.

Write to Don Clark at don.clark@wsj.com

(END) Dow Jones Newswires

December 14, 2016 17:50 ET (22:50 GMT)

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