Arista Networks (ANET) Said Barred from Importing and Selling Infringing Covered Products in U.S.

July 5, 2017 9:14 AM EDT

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Arista Networks, Inc. (NASDAQ: ANET) announced the completion of the Presidential review period for International Trade Commission (“ITC”) Investigation No. 337-TA-945 (the “945 Investigation”).

Cisco Systems, Inc. (NASDAQ: CSCO) initially filed a complaint in the 945 Investigation accusing Arista of infringing six patents (U.S. Patents 7,023,853; 7,061,875; 7,460,492; 8,051,211, 6,377,577 and 7,224,668). The Commission issued a Final Determination in the investigation on May 5, 2017, finding that Arista’s Ethernet switching products did not violate section 337 of the Tariff Act (“Section 337”) with respect to four of the six patents under investigation (the ’853, ’875, ’492 and ’211 patents) but did infringe certain claims of two patents (the ‘577 and ‘668 patents). Accordingly, the ITC issued a limited exclusion order and cease and desist order concerning Arista’s Ethernet switching products. During the 60-day Presidential review period, the ITC Orders permitted Arista to continue importing and selling products covered by the orders so long as Arista paid a 5% bond.

Because the United States Trade Representative did not disapprove the ITC’s final determination, the limited exclusion order and cease and desist order (the “ITC Orders”) are now in full effect, and Arista is barred from importing and selling infringing covered products in the United States.

In separate proceedings in the Patent Trial and Appeal Board (“PTAB”), on May 25, 2017 and June 1, 2017, the PTAB issued final written decisions invalidating all claims of the ’577 and ’668 patents that Arista was found to infringe by the ITC. Accordingly, on May 30, 2017 and June 2, 2017, Arista filed emergency motions with the ITC seeking suspension of the ITC Orders pending completion of any appeals of the PTAB decisions. On June 12, 2017, Cisco filed a brief in response objecting to any suspension of the ITC Orders, while the staff attorney from the Office of Unfair Importation Investigations (“OUII”), a neutral third party representing the interests of the public in ITC investigations, also filed a brief in support of the requested suspension. As of July 3, 2017, the ITC has not ruled on Arista’s motion to suspend.
Arista has been working on modifying its products to address the ITC Orders. If the ITC does not suspend the ITC Orders, Arista intends to release these modified products as soon as practicable and work with customers on their qualification and deployment. Arista will also seek appropriate regulatory approvals for these modified products.

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