Arista has received an early Christmas present. The United States Customs and Border Protection agency ruled that the company’s current products, which contain its redesigned Extensible Operating System (EOS) do not infringe on Cisco patents.
EOS 4.16 or later “are not within the scope of the limited exclusion order issued by the United States International Trade Commission… and therefore may be imported into the United States,” according to a Securities and Exchange Commission Form 8-K.
For three of the patents, Cisco’s accusations were either dropped or rejected by the International Trade Commission (ITC). But in June the ITC determined that prior versions of EOS contained features that infringed the remaining three patents. The ITC issued an order that prohibited Arista from importing or selling infringing products into the United States.
To address the ITC’s findings, Arista redesigned EOS.
The three patents for which the ITC found infringement covered only two features, PVLAN and SysDB. Arista was able to remove the PVLAN, which apparently was barely used by its customers, and it was able to redesign the SysDB feature.
Arista also began aggressive moves to manage its inventory. Its last couple of earnings calls were dominated by questions about supply shortages for the components that make up its products.
But that’s all just bad memories now.
Customs and Border Protection issued instructions to the U.S. ports to permit entry of Arista’s redesigned products for consumption and sale in the United States.
“We view this as a net positive given that the ban has acted as a gross margin headwind,” writes RBC Capital Markets analyst Mitch Steves in a research note today.
Arista’s stock is up 6 percent this morning.
Editor’s Note: This article was updated to include additional details about the redesign of Arista’s EOS.