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Protecting Innovation: ITC Clear on Ruling, Remedy, and Rationale

- July 28, 2016 - 0 Comments

This week the International Trade Commission (ITC) released the public version of its ‘944 ruling, which shows intentionality of Arista’s infringement, confirms that Cisco patents are valid, and rebuffs arguments against a ban. The document details the full rationale for the ITC’s finding of intentional infringement by Arista of three Cisco patents, and its remedy of an exclusion order, and a cease and desist order covering all Arista switches. This includes blocking the importation of components or assembly of any products using imported components.

It’s important to note that Arista made no challenge at the Patent and Trademark Office to the validity of the two PVLAN patents that were found infringed. For the third infringed patent, covering Cisco’s core SysDB architecture where Arista’s documentation follows “slavishly” the Cisco patent language, Arista’s attempt to initiate a review of validity was rebuffed for six of the claims the ITC found infringed. For summary details about the Cisco patents and Arista’s infringing use, please see our February blog, Protecting Innovation: The Beginning of the End.

Key takeaways from this week’s public ruling describe Arista’s unlawful actions and make clear that attempts to evade the agency’s authority will not be tolerated.

  • Willful and Intentional Infringement:
    The ITC concluded that, when it infringed Cisco patents (page 18, paragraph 4) related to Sysdb and Private VLAN, Arista did so willfully and intentionally.

    • The Commission confirmed that Arista had knowledge of the asserted patents (page 20, paragraph 3) and Arista was found to have “actively induced third parties to infringe” (page 23, paragraph 3).

 

  • Public Interest:
    The public interest supports the chosen remedy because there are numerous alternative networking technologies available to customers, demand can be met, and there is no harm to competitive conditions if Arista’s infringing products are excluded (page 58, paragraph 2).

    • Only once in 30 years has the President of the United States stopped the ITC from executing an exclusion order due to significant impact on the public interest. Those circumstances do not apply here, where many competitors are active in the market and where none of the patents cover either an industry standard. The Presidential Review period ends on August 22, 2016.

 

  • Changes to Importation Processes:
    Because the ITC also found that components are covered, the order cannot be evaded by importing components and assembling the infringing product in the U.S. (page 6, paragraph 4; page 7, paragraph 1).

    • The ITC still has jurisdiction, if ANY of the parts or components are imported. This ruling is significant – even in light of Arista’s recent announcements about the intent to relocate contract manufacturing.
    • Once the Presidential Review Period concludes, the service and warranty for products sold prior to the finding of infringement may be honored. However, the same is not true for any device sold AFTER the ITC ruling. This means the risk is shifted to Arista’s customers, should the company attempt to evade the remedy through new assembly practices.

During the process to determine what should be shared transparently with the public, Cisco did not ask for any information to be withheld from the public, and called on Arista to do the same. All redactions included in the public document were therefore made by Arista.

The ITC ruling has direct implications for customers, partners, investors, and suppliers. We believe those making business and investment decisions deserve to know all the facts. Those who want to be fully informed should ask Arista for a complete version of the final ruling.

Limited transparency and questionable tactics do not provide confidence that they intend to do the right thing, the thing that Cisco has requested from the day we filed this case: stop using stolen IP.

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