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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 17, 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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Cisco Suggests Huawei Release Court Report on Intellectual Property Misuse

Recently,  Mr. Charles Ding, Huawei Corporate Senior Vice President and Chief Representative in the United States spoke publicly about Huawei’s use of Cisco’s intellectual property.

While Huawei’s statements were in a context unrelated to the competitive relationship that Cisco and Huawei have, they nonetheless bear directly on issues that anyone concerned about fair competition in the networking industry ought to be thinking about. Mr. Ding contended that Cisco’s litigation with Huawei in 2003 and 2004 was unjustified. This is the litigation in which Cisco claimed unauthorized use of Cisco’s source code in Huawei products.

Mr. Ding said: “If I remember well, that happened in 2003, when Cisco sued Huawei for intellectual property rights infringement …at that time, Huawei provided our source code of our products to Cisco for review and the results were that there was not any infringement found and in the end Cisco withdrew the case…this is the basic situation of that case.”

When asked, “didn’t Huawei admit that Cisco’s code was in your equipment?”, Mr. Ding stated, “As specifically to the source code, the source code of the issues was actually from a 3rd party partner that was already available and open on the internet.”

In fact, within a few months of filing suit, Cisco obtained a worldwide injunction against sale by Huawei of products including our code for a Cisco-proprietary routing protocol called EIGRP, and Huawei publicly admitted that the code had been used in their products and they pledged to stop.  They even said they had removed that code from the products voluntarily prior to the judge’s action.  After the injunction was issued, Huawei agreed to an expert review of the balance of its code, above and beyond the EIGRP module.  More than a year later, the litigation was indeed concluded.  What happened in the interim, how many reports a court appointed expert released, and what was done as a consequence, were all covered by a confidentiality agreement.

Our legal advisers tell us that given Mr. Ding’s statements, we would be justified in releasing the full report.  To facilitate the understanding about what actually happened in the litigation and allow Huawei to itself clear up any confusion, we waive any confidentiality requirement for the report and suggest that Huawei itself have the expert’s complete final report put into the public domain.   Fair competition, indeed, requires transparency of business practices and a respect for intellectual property rights.

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