Arista Settles IP Dispute With Cisco -- WSJ
August 07 2018 - 3:02AM
Dow Jones News
By Micah Maidenberg
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (August 7, 2018).
Arista Networks Inc. agreed to pay Cisco Systems Inc. $400
million as part of a settlement that resolves much of the
litigation between them.
The companies have been battling in court for several years over
intellectual property and antitrust claims.
"Cisco and Arista have come to an agreement which resolves
existing litigation and demonstrates their commitment to the
principles of IP protection," the companies said in a joint
statement Monday.
At the heart of the dispute was whether Arista infringed on
Cisco's intellectual property like programming commands used to
configure Cisco networking hardware. Cisco claimed Arista could
have developed its own commands, but Arista said those commands had
become an industry standard used by many companies.
Heightening the drama is the fact that Arista CEO Jayshree Ullal
is a former Cisco executive who was once close to John Chambers,
the former top executive at San Jose-based Cisco.
In addition to the payment Santa Clara, Calif.-based Arista will
make, the companies agreed to use arbitration, at least for the
next three years, to resolve patent infringement issues connected
to new products or related to new features in existing
products.
For the next five years, the companies agreed that, with certain
exceptions for source code claims, neither will file legal actions
against the other for products that are currently on the market.
Arista's filing described this as a "stand-down period" in its
filing.
Cisco first sued Arista in federal court in December 2014 over
the issue. About a year later, Arista claimed Cisco violated
antitrust rules by allowing rivals to use the commands, locking
them into using the technology. Then, according to Arista, Cisco
claimed copyright protection.
With the settlement in place, Arista and Cisco will avoid
litigating their differences before a jury. The companies plan to
halt a trial related to the 2016 antitrust case Arista brought
against Cisco, according to Arista's securities filing. That trial
was scheduled to start Monday.
The companies added in their joint statement that they will
continue to seek court review of an appeal connected to a patent
case that Arista won in 2016. In that decision, a jury said that
Arista didn't infringe on a Cisco patent and copyright related to
the command-line technology.
In its securities filing, Arista said it also agreed to make
certain changes to its command-line technology.
Shares of Arista rose 4.9% on Monday to $270.23 following the
news. Cisco's stock was up almost 1% to $43.24.
Write to Micah Maidenberg at micah.maidenberg@wsj.com
(END) Dow Jones Newswires
August 07, 2018 02:47 ET (06:47 GMT)
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