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Arista switches legal team in suit with co-founder

Replaces firm that represented company during IPO; also awards $12.5M to Bechtolsheim

Arista Networks has replaced its attorney in the contentious legal battle with co-founder David Cheriton and his company, OptumSoft. According to this post in The Recorder, Arista recently hired Latham & Watkins as a substitute for previous representation from Wilson Sonsini Goodrich & Rosati, the same firm that represented Arista in its IPO.

Could Arista be losing the intellectual property ownership battle with OptumSoft? A company spokesperson on the reason for the switch maker's switch:

Wilson Sonsini continues to represent the company in corporate matters. We engaged the Latham litigation team based on our history with them during the IPO process. We thought it was an appropriate time as the litigation is only beginning.

OptumSoft, a stealth software company founded by Cheriton, is suing Arista for breach of contract, misappropriation of trade secrets and declaratory relief involving a compiler – called TACC -- Arista licensed royalty-free from OptumSoft for use in it EOS operating system. OptumSoft claims ownership of “improvements, corrections or modifications to” TACC, as well as any “derivative works thereof, made by or for” Arista involving TACC, such as EOS.

Arista countersued on April 14, claiming OptumSoft is a failing company trying to capitalize on the financial success of another just as it is about to raise additional capital through a public offering. Arista claims it developed the system database (SysDB) for EOS and did not license it from OptumSoft – it only licensed the software development tools in TACC to build EOS internally, including SysDB.

After a series of document exchanges and the replacement of Arista’s legal representation, it appears the two litigants are due back in court Sept. 22.

Meanwhile, Arista co-founder Andy Bechtolsheim looks like he’s in for a nice fat holiday bonus from the company. Arista filed a promissory note back in 2011 pledging $12.5 million, plus 6% interest, to The Bechtolsheim Family Trust. The maturity date on the note is Dec. 31, 2014.

UPDATE: Arista says all convertible notes - including those held by Bechtolsheim's trust - were either converted into common stock or repaid at the IPO. Consequently, there are no convertible notes outstanding.

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