In yet another chapter in the ongoing patent dispute between Cisco and Arista, the U.S. Patent Trial and Appeal Board (PTAB) sided with Arista yesterday when it invalidated Patent ‘668, which was the second of the two patents that Arista was found to have infringed upon by the International Trade Commission (ITC) in its 945 investigation.
This decision follows a similar ruling May 25 in which the PTAB invalidated patent ‘577, which Arista had also been found to infringe.
“Arista welcomes the successful invalidation of all relevant claims of both the ‘577 and ‘668 patents in the PTAB. We will now seek complete suspension of the ITC’s remedial orders for the entire 945 investigation,” said Marc Taxay, senior VP and general counsel for Arista.
Not surprisingly, Cisco is unhappy with the PTAB’s ruling and said it would appeal the decision.
“We disagree with the Patent Office decision regarding the ‘668 patent, particularly since the ITC rejected Arista’s validity challenges and found the patent both valid and infringed. We intend to appeal the Patent Office’s decision, which will be the final determination regarding validity of the ‘668 patent. The Patent Office’s decision here has no impact on the other patents Cisco has asserted in its District Court case,” said Mark Chandler, SVP and general counsel at Cisco, in a blog post.
Chandler also said that Cisco is disappointed in the PTAB’s decision about the ‘577 patent but said that decision does not impact the ITC ‘945 proceedings, which seems to contradict what Arista and analysts have said.
Also, Chandler said that Cisco is pleased that the U.S. Patent and Trade Office upheld the validity of the company’s ‘537 patent, which covers Cisco’s proprietary SysDB technology. Chandler said that ITC enforcement of that patent and Arista’s alleged infringement are underway.
Arista Outlook Favorable
Nevertheless, analysts are bullish on Arista’s future. Wells Fargo analyst Jess Lubert said in a research note that the investment firm views the PTAB’s findings regarding the ‘668 patent as an “important positive development as both of Cisco’s patents Arista was found to have violated in the ITC’s 945 case have now been invalidated.”
Likewise, Oppenheimer analyst Ittai Kidron said the PTAB’s decision to invalidate all relevant claims on the two patents are positive for the firm and gave shares of Arista stock an outperform rating.
At deadline Arista’s stock was trading up 2.48 percent to $151 per share.
These two networking companies have been battling since December 2014 when Cisco filed multiple lawsuits against Arista claiming infringement on some of its patentable technology as well as over 500 command-line interface (CLI) commands. In addition, Cisco claimed that Arista used a Cisco-like interface as a selling point for its switching technology. Here’s a timeline of the battle as of December 2016.