Scrutinizing The Cisco-Arista Legal Findings
The legal battle between Cisco and Arista has heated up in a big way. Earlier this month, Judge David Shaw of the International Trade Commission (ITC) released the public version of the findings in the case. The findings reveal curious aspects of this case that raise questions about Cisco’s intentions and put a spotlight on Silicon Valley work culture.
In short, the ITC has ruled that Arista did infringe upon the patents held by Cisco around SysDB. The ITC’s initial determination outlines all of the evidence for this finding, including interviews from senior Arista officials and others that discuss how Arista turned a blind eye to copying patented technology and later implemented it in its Extensible Operating System (EOS). The language in the court’s findings makes it appear that Arista’s infringement was very willful and not limited to SysDB, but to Cisco’s private VLAN implementations as well.
To remedy the patent infringement, the ITC recommends that Arista either modify EOS to no longer use SysDB or stop selling the products that use this technology. The judge also recommended an exclusion order and a cease-and-desist order. All of these remedies fall in line with what Cisco asked the court for in its original filings.
Setting aside the legality of this infringement and its consequences for moment, there are some peculiar things in the court rulings that warrant discussion. First, the only Cisco software product that currently uses SysDB in production is IOS XR. This service provider focused OS runs on the largest router platforms in Cisco’s portfolio and has a command line syntax that is very reminiscent of Juniper Networks Junos operating system. IOS XR doesn’t command a large portion of Cisco’s annual revenue. This raises the question of how much Arista’s infringement of SysDB impacts Cisco’s bottom line. Given that IOS XR is exclusively a router operating system and Arista EOS is exclusively a switching operating system, one might even ask if they have any impact on each other at all.
The second curious fact is that the ITC’s recommended remedies don’t include an option for licensing the infringed patents. In many patent infringement lawsuits, plaintiffs often seek to have defendants license the technology from them to remedy the situation.
Take the infamous Eolas ActiveX lawsuit against Microsoft from 1999, for example. Eolas won the case and collected $521 million in damages from Microsoft. Microsoft eventually licensed the ActiveX technology from Eolas to solve technical issues in ActiveX controls in 2007. Eolas also sued several other companies using similar technologies and extracted patent license fees from them until 2013, when an appeals court ruled that the patents Eolas claimed were infringed upon were actually invalid.
Why hasn't Cisco asked for a license fee from Arista? If SysDB is only being used in IOS XR and there is no real overlap between the two operating systems in the market, it would make sense for Cisco to force Arista to pay damages or a fee of some kind for use of SysDB. Given the success of Arista in recent months, that licensing fee could lead to a substantial amount of money for Cisco. However, since most of that recent success has come at the expense of market share for Cisco, it could be assumed that Cisco doesn’t care about the money. It would rather see Arista lose money reconfiguring EOS or forced to stop selling products than handing over a fine or fee.
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The third curious item comes from some of the interviews in the documents. I recently spoke with some IT professionals who have followed this case from the start; they believe the infringed patents were developed either by Cisco employees who went to Arista after the fact or that assistants to those patent developers went to work for Arista. That does have a clear line that can be traced back to those patents for the purposes of the lawsuit. But since those people moved on to Arista, one might infer that Cisco intends this lawsuit as a warning to those leaving for greener pastures.
In the tech industry, people move on to new companies all the time. They get bored with their current role and need a new challenge or they find someone paying better rates for the same work. No matter the reason, those people take their expertise and ideas to new companies and do things there that keep Silicon Valley going. The key is to make sure when you go that don’t take anything you had been working on at your old company with you. In theory, this is easy. In practice it’s a bit different. Technology bleeds between companies because of people.
As the largest networking vendor in the space, Cisco loses as many people to competitors as it gains to replace them. For Cisco, the tipping point is when the company that is hiring away a large majority of those engineers becomes a credible competitor. It wouldn’t be out of the realm of possibility for Cisco to have filed this lawsuit in part to serve as a warning to employees to be very careful about where they go for their next career opportunity lest they cause that company to come under the scrutiny of Cisco.
How does all this break down for Arista customers? Given the judge’s response to the case there is little doubt that Arista is against the wall right now. Thankfully, the modular aspects of EOS should allow for Arista to go in a rebuild the central database structure to create an infringement-free product that can be sold in the US without raising the ire of Cisco. The final review of the patent claims on these items won’t happen until Aug. 9. And, there will be appeals and other legal actions that will buy time for Arista to make changes or develop a new EOS version that doesn’t infringe.
If you’re currently looking at buying Arista products, it’s time to have a conversation with your account team about the impact of this legal ruling on both Arista’s future and your own network projects. Don’t get uncomfortable when you ask how this will impact product orders after August. Be sure to discuss how EOS is going to change to get around this infringement. It’s much better to have this conversation now rather than in six months when Arista is against the wall and forcing customers to make changes. In this case, forewarned is forearmed.
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