Cisco Systems Sues Rival Arista Networks
Cisco Systems Inc. on Friday sued Arista Networks Inc., accusing the fast-growing competitor of infringing on an array of Cisco patents and copyrights associated with its networking equipment.
The accusations are contained in separate complaints against Arista, a company led by former Cisco executives that went public six months ago and sports a market valuation of nearly $5 billion.
Cisco accused Arista of infringing on 14 patents that cover important features of Cisco products. The company also accuses Arista of extensively copying other Cisco intellectual property, including copyright material from user manuals and more than 500 commands used to configure networking equipment.
The complaints were filed in federal court in the northern district of California.
Jayshree Ullal, a former Cisco senior vice president who is Arista's chief executive, said the company had not yet received Cisco's formal complaints.
But she added: "I am disappointed at Cisco's tactics. It's not the Cisco I knew."
Arista's shares fell 1.9% to $72.17 in midday trading, while Cisco shares stood at $27.69, down 8 cents.
Mark Chandler, Cisco's general counsel, said he had not authorized a patent-infringement suit in 11 years, though dozens of companies have been founded by former Cisco personnel. But Arista's actions "if unstopped, will embolden others to seek to do the same," he wrote in a blog post.
The dispute emerges at a time when Cisco has struggled to boost its revenues, particularly in sales of routing and switching products to corporate customers. Cisco last month said switching revenue rose 3% in its first fiscal period after several quarterly declines, while total revenue grew just 1%.
Arista, by contrast, has benefited by marketing its own switching systems to Wall Street customers and Web services that have been among the most active hardware buyers in recent years. Its revenue in the third quarter grew 53%, according to a November report.
The 10-year-old company was co-founded by Andy Bechtolsheim, an engineer and entrepreneur known for designing the first computers sold by Sun Microsystems Inc. and as one of the first investors in Google Inc. He also worked at Cisco after the company bought a startup led by Mr. Bechtolsheim, who is named as an inventor on some of the patents asserted by Cisco in the litigation.
In its copyright complaint, Cisco accuses Arista of copying verbatim sections of text from Cisco documents, in some instances including grammatical errors contained in the originals. Other parts of the complaint accuse Arista of employing the same strings of text as engineers use to configure Cisco hardware, using a programming approach known as a command line interface.
Mr. Chandler said Arista has its own interface, but it chooses to use Cisco's because customers are more familiar with it.
Whether copyright law applies to other programming elements called application programming interfaces, or APIs, is a key issue in litigation filed in 2010 by Oracle Corp. against Google. The Internet company has asked the U.S. Supreme Court to overturn an appeals court ruling in Oracle's favor.
Mr. Chandler said that ruling supports Cisco's position against Arista, but he believes Cisco would prevail even if the ruling were overturned because of differences in the cases.
The Cisco complaints ask for unspecified damages. But Mr. Chandler said the main goal is an injunction that would bar Arista from selling products that violate its intellectual property.
Cisco filed a high-profile patent suit in 2003 against Chinese rival Huawei Technology Co., a case that the companies settled the next year.
Write to Don Clark at firstname.lastname@example.org