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Protecting Innovation

Earlier today the International Trade Commission issued a preliminary ruling in the first of their ITC investigations related to Arista’s systemic copying of Cisco’s intellectual property. This decision represents the beginning of the end for Arista’s systemic copying of Cisco’s intellectual property. Please read Mark Chandler’s blog for additional information.

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Protecting Innovation: The Beginning of the End

Earlier today, the International Trade Commission (ITC) issued a ruling in the first of their investigations into Arista.

This follows a lengthy investigation, a review of thousands of pages of briefing materials and supporting evidence, and a two-week hearing involving testimony and cross-examination. We thank Judge Shaw and the ITC staff for their diligence.

Specifically the Judge’s ruling:

  1. Found violations of three patents: U.S. Patent 7,162,537 (“[E]xternally Managing Router Configuration Data … With A Centralized Database”) (Sysdb) and U.S. Patent Nos. 6,741,592 and 7,200,145 (Private VLANs)
  2. Foreshadows an exclusion order banning imports of all Arista switches (implemented after confirmation by the full Commission).
  3. Installs a challenging ITC review process for any new designs (the result of not bringing evidence of new designs to the ITC hearing).

The details of the Judge’s determination will be published within 30 days, but this notice marks the beginning of the end for Arista’s systemic copying of our intellectual property.

Arista can no longer support claims to customers, resellers, and the market that they created products from “a clean sheet of paper.” The patents in question go to the core of Arista’s products. One of those found to infringe covers Cisco’s proprietary “SysDB.” Arista’s CEO has previously referred to “SysDB” as Arista’s “secret sauce” and more recently, the architecture on which NetDB is built. None of the patents have been proposed for or adopted as industry standards. And all patents we asserted against Arista were invented either by Cisco employees who became Arista executives, or by Engineers who worked for Arista executives when employed at Cisco.

We seek fair competition, but will take action against those who misappropriate our technology and use it to compete against us. Based on our investigation, we believe that Arista’s use of our IP was intentional, pervasive, and driven by the most senior levels of their organization to unfairly compete. Copying and misappropriation are not a legitimate strategy, and today’s ruling is a vindication of our position.

We now see four options for Arista:

  1. Withdraw the products.
    This was the honorable path taken 12 years ago by the only other company that we caught intentionally using our intellectual property in their products.
  2. Modify the products so that they no longer infringe.
    Arista could have submitted new designs during the ITC investigation, but chose not to do so. We now call on them to disclose and submit any workarounds for the required ITC scrutiny.
  3. Face an exclusion order.
    Ignoring the order would result in further sanctions, including a potential permanent injunction against the sale of their products in the United States.
  4. Evade the ITC exclusion order.
    Instead of working around our intellectual property, Arista could try to work around the ITC. Any attempt to avoid an import ban by changing how they source and assemble products fails to acknowledge that ITC rulings cover components imported to make infringing products. This would be a cynical strategy that could expose their suppliers to liability for infringing Cisco’s patents, and validates customer and partner concerns about buying infringing products.

And this is just the beginning. In April we will see a ruling in the second ITC investigation, which may confirm more violations and import bans. Arista will also face two District Court juries with these rulings on their record. The judges and juries in those trials will note this day as the day that Arista no longer can pretend that its products aren’t tainted by misconduct. This will be important as they consider injunctions to remove infringing Arista product from the market.

Cisco’s goal has always been to protect our innovation, and stop Arista from using our patented technology. Their behavior has negative consequences for the industry, and is unfair to those who were sold infringing products and those competitors – beyond Cisco – who are working hard to play by the rules. We see today’s ruling is an important step towards accountability.

 

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Protecting Innovation: Cisco seeks only fair competition

Arista’s filing of bogus antitrust claims today is not accidental or a coincidence.

The claims, most of which were included in earlier Arista filings, are a smokescreen to divert attention from the important ruling expected from the International Trade Commission (ITC) on February 2*. This is when Judge Shaw will rule on the validity of five Cisco patents and whether Arista infringed any of those patents. We chose the ITC as a forum because of its defined and accelerated timetable. If infringement is found, Arista, despite their efforts to delay the ITC process, may be just a few months from an exclusion order banning a majority (or all) of their products entering the United States.

The antitrust claims may also be a pretext to muddy a District Court trial scheduled for November, just as Arista used procedural tactics in a failed effort to delay the ITC actions. Arista missed the deadline for amending their claims in the CLI case to which they are seeking to add these new claims, after they got only a portion of the long delay they earlier sought from Judge Freeman.

Let me be clear. We welcome the opportunity to show that Cisco’s business practices are consistent with a highly competitive and vibrant industry. We seek only fair competition, but will take action against those who misappropriate our technology and use it to compete against us.

By contrast, the extent of Arista’s copying of our CLI sets them apart from others in the industry. They have directly lifted more than 500 multi-word command line expressions. By comparison, networking products from HP, Brocade, Alcatel-Lucent, Juniper Networks and Extreme each have only a small fraction of overlapping commands. It is no surprise then, that when Arista’s Chief Technology Officer and Senior Vice President of Software Engineering was asked about the CLI, he references his company’s “slavish” copying.

Our goal has always been to protect Cisco’s innovation, and stop Arista from using our patented and copyrighted technology. Arista’s behavior has negative consequences for the industry, and for their customers and partners who were sold products using stolen technology. They can no longer delay the inevitable.

* Updated 27 January 2016: The due date for Initial Determination in ITC Case 944 has been extended to 2 February 2016. This change is in response to the Federal Government closures that took place this week due to inclement weather in Washington DC.

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Protecting Innovation: Update on District Court and ITC Actions

Our legal action to stop Arista’s copying and use of Cisco’s intellectual property is proceeding according to schedule. With a number of important procedural steps about to take place, we feel now is a good time to provide an update.

Last December we brought two actions in the United States District Court for the Northern District of California. All of the related patents cover features that were invented by individuals who worked for Cisco and who are now at Arista, or by individuals at Cisco who worked with executives who are now at Arista.

District Court: Networking Features Case

  • This case will be overseen by Judge White in Oakland, and relates to Arista’s copying and infringement of key features covered by 12 Cisco patents.
  • Because the case addresses many areas being covered in the International Trade Commission (ITC), it has been “stayed” or put on hold pending resolution in the ITC. Cisco anticipated and consented to the stay requested by Arista to ensure efforts are not duplicated.
  • Much of the discovery completed as part of the ITC action will be directly applicable when this case proceeds to trial.

District Court: Operating System and Interface Features Case

  • This case will be overseen by Judge Freeman in San Jose, and relates to Arista’s use of Cisco’s proprietary and unique interface for which Cisco owns copyrights and two patents.
  • The trial is scheduled to begin on August 1, 2016.
  • After Cisco brought this action, Arista introduced its EOS+ product, which they claim added new features and functionality related to the interface. Because Arista knew of our action and EOS+ adds new ways to use Cisco technology, we amended our filing to demand extra penalties for “willfulness.”
  • Judge Freeman recently asked Cisco to further amend our complaint to make clearer that EOS+ was a new product. We submitted a second amended complaint as Judge Freeman requested and Arista did not move to dismiss its revised allegations about EOS+. Despite recent reports describing this as a setback for Cisco, all of our claims, including willfulness, will be heard by the Court as we proceed to trial.

In order to expedite resolution of these matters, Cisco requested that the International Trade Commission in Washington, D.C. commence two investigations into Arista’s infringement in importing products into the United States. The ITC typically resolves patent cases more quickly than the district courts, and has the power to block the importation of products that infringe US intellectual property. This will allow us to stop Arista from importing products based on copied technology, which are today manufactured abroad, into the US.

ITC Investigation: ‘944 Case

  • Key Dates:
    • September 9, 2015 – Hearing begins this week.
    • January 27, 2016 – Final Initial Determination, subject to review by the full ITC. May include an “exclusion order” if infringement is found.
    • May 27, 2016 – Target date for completion of investigation and issuance of final determination, subject to a 60-day Presidential Review if infringement is found.
  • This investigation is being held before Administrative Law Judge Shaw, who has standing rules to streamline cases by limiting the number of asserted patents and claims. To comply with these routine procedures, Cisco plans to reduce the number of patents pursued in this investigation.
  • The decision to drop one or more patents covering overlapping technologies will be made with the benefit of discovery, knowing that they can and will be pursued in the District Court networking features case.

ITC Investigation: ‘945 Case

  • Key Dates:
    • November 9, 2015 – Hearing begins this week.
    • April 26, 2016 – Final Initial Determination, subject to review by the full ITC. May include an “exclusion order” if infringement is found.
    • August 26, 2016 – Target date for completion of investigation and issuance of final determination, subject to a 60-day Presidential Review if infringement is found.
  • This investigation was originally assigned to Administrative Law Judge Pender, who held a claim construction hearing in June to determine the definition of 17 terms (out of hundreds in the patents) to be used at hearing.
  • We now look forward to having our claims heard before Administrative Law Judge McNamara.

We will continue to provide updates on any significant developments.

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Cisco Testimony On Consumer Protection at Senate Committee

Today, before the United States Senate Consumer Protection Subcommittee, Cisco SVP and General Counsel Mark Chandler had the opportunity to talk about a new and troubling kind of scam dressed up with language such “patent infringement” and “innovation.” As he shared with the Subcommittee, the perpetrators of this scam are sending out thousands of threat letters to small businesses and consumers, and file lawsuits in the hope of a big payday, not based on the merits of the case, but on the fears of victims who just want to make a problem go away.

These victims — mom and pop stores, hospitals, pharmacies, car dealers, — aren’t manufacturers of products, they’re simply users, like you and me.

Chandler’s full testimony can be read on the U.S. Senate Commerce Committee website here.

His oral testimony as offered to the committee is in full below:

Madam Chairman, Ranking Member Heller, members of the Subcommittee,

My name’s Mark Chandler, and I’m Senior Vice President and General Counsel of Cisco.

Today I will describe our experience with a new kind of scam based on a formula that’s as old as the hills, but dressed up with the language of “patent infringement” and “innovation”.

The perpetrators send out thousands of threat letters to small businesses and consumers, and file lawsuits in the hope of a big payday, not based on the merits of the case, but on the fears of victims who just want to make a problem go away.

These victims — mom and pop stores, hospitals, pharmacies, car dealers, — aren’t manufacturers of products, they’re simply users, like you and me.

I’m involved as General Counsel of Cisco because I want to defend my customers. But we need your help in bringing a little sunshine to this dark corner of the patent system.

Read More »

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