Cisco Lawsuit Against Arista Hits Setback After Federal Judge Dismisses Two Claims

A U.S. federal judge has dismissed Cisco's claims for indirect infringement against its rival Arista Networks that occurred prior to the filing of its patent infringement lawsuit in December, and also one of its willful infringement claims.

Cisco's legal counsel indicated to CRN that it will attempt to refile a revised version of the dismissed claims.

In December, the San Jose, Calif.-based networking giant filed two lawsuits against Arista alleging the company infringed on a number of its patents and had stolen Cisco copyrighted material. Cisco alleges Arista, whose CEO Jayshree Ullal was the former senior vice president of Cisco's data center switching business, stole 12 "discrete and important" Cisco switching features covered by 14 different U.S. patents to use in its own products.

[Related: Supreme Court Rules Against Cisco In Wireless Patent Case]

Cisco also claims Arista stole more than 500 of Cisco's command-line expressions from its IOS network operating system to use in Arista's own EOS software.

Soon after the claims were brought against Arista, the Santa Clara, Calif.-based company unveiled an enhanced EOS product line, EOS+, a version of the operating system with deeper programmability and preintegrated applications.

The key issue raised by Arista's motion to dismiss is whether its release of the EOS+ software product after Cisco's filing of the lawsuit can form the basis of a claim for willful infringement separate from Cisco's original claims. If found, willful infringement supports an award of enhanced damages.

U.S. District Judge Beth Freeman declined to commit to a specific legal test for evaluating this potential claim, but she decided that the specific facts alleged by Cisco in its First Amended Complaint -- which involve marketing made by Arista regarding EOS+ -- were not sufficient to support a willfulness claim.

"The Court finds that [Cisco] has failed to allege sufficient facts," wrote Freeman. "The Court would be willing to revisit this issue. At this stage, however, allegations summarizing Arista's puffery in sales and marketing materials is not enough. [Cisco] must therefore plead that [Arista's] conduct did more than continue selling the alleged infringing product."

Because Cisco conceded it was not seeking damages for pre-suit indirect infringement, Judge Freeman directed it to clarify in its amended complaint that the damages it seeks in this regard are only for Arista's conduct that allegedly occurred after the initial lawsuit. Federal rules of procedure permit Cisco to amend its complaint with permission from the court, which was granted by Judge Freeman.

It remains to be seen whether Cisco's revised claims will pass muster or whether they will still be deemed insufficient.

Mark Chandler, senior vice president and general counsel at Cisco, said that the ruling did not come as a surprise based on statements made at the July 2 hearing, and is confident Cisco will be able to successfully revive the two dismissed claims by submitting an amendment by the July 23 deadline issued.

"Judge Freeman's order giving us the opportunity to amend our complaint is exactly what we expected after last week's hearing," said Chandler. "Arista is left in the strange position of arguing in court that their claims that the EOS+ product is 'pioneering,' were actually just 'marketing puffery,' as the judge put it. They introduced EOS+ even after they knew of our allegations that they had used our patented technologies, so there can be no doubt that their action was willful. Their motion against the willfulness allegation doesn’t rest on denial of infringement, but rather suggests that EOS+ is just a minor tweak to their earlier infringing product. Having owned up to that, maybe they will decide to step forward and admit their patent infringement."

Judge Freeman indicated that in order to state a claim for post-lawsuit willful infringement, Cisco will have to prove that Arista has continued to engage in additional conduct beyond simply continuing to market and promote the existing EOS+ product.

Arista declined to comment on the legal matter when reached.

Most of Cisco's patent and its multiple copyright infringement claims are not impacted by the judge's order and will continue to proceed.

PUBLISHED JULY 17, 2015