Arista Countersues Cisco, Claiming Antitrust Violations

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Alleges unfair competitive practices on eve of ruling in earlier patent case

Two days before a ruling in a patent infringement case between the companies, Arista Networks is suing Cisco Systems for what it alleges are antitrust violations.

Arista today filed a counterclaim to Cisco’s 13-month-old copyright infringement suit in the U.S. District Court, Northern District of California, for antitrust and unfair competition. Arista alleges Cisco conducts a “bait and switch” with its command line interface in which it claims it is an industry standard and then attempts to penalize competitors for emulating it.

Arista also claims Cisco raises the price of its SMARTnet service and support contracts for customers who deploy competitive networking equipment alongside their Cisco infrastructure.

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Arista says these actions violate Section 2 of the Sherman Act, 15 U.S.C. § 2, and California’s Unfair Competition Law, Cal. Bus. & Prof. Code § 17200 et seq.

“At Arista, we believe that a free and competitive marketplace best serves the needs of our customers and should be built upon open standards,” the company said in a statement. “When a monopolist reverses course after many years and asserts proprietary ownership of industry standards in order to protect its dominant market position and crush innovative competition, it harms the entire industry. Today, after careful deliberation, we seek leave to file counterclaims against Cisco for illegally undercutting vital and thriving aspects of our open industry.”

The complaint comes two days before a notice of determination in a separate patent infringement case brought against Arista by Cisco in December, 2014, before the International Trade Commission. On Wednesday, the ITC is expected to determine whether Arista infringed on three to five Cisco patents after ITC staff attorneys recommended the court find for Cisco on three of them.

Another ITC case involves six other patents Cisco claims Arista is infringing upon.

With today’s actions, Cisco says Arista is trying to divert attention away from Wednesday’s ITC determination.

“Arista’s filing of bogus antitrust claims today is not accidental or a coincidence,” says Mark Chandler, Cisco senior vice president and general counsel. “It is a smokescreen to divert attention from the important ruling expected from the ITC later this week. It is no doubt a pretext to delay the CLI District Court case scheduled for November.”

The CLI copyright case is being heard in the US District Court in California. Arista claims Cisco has been touting its CLI as an industry standard since 2000, four years before Arista was founded by former Cisco executives and engineers, and back when Cisco virtually owned the switching market.

When Arista and other vendors sliced off a significant chunk of that share, Cisco started claiming its CLI was proprietary and began a campaign to protect its intellectual property – including suing Arista in December of 2014. That trial starts in November.

Cisco claims Arista copied 550 command lines of its CLI, while vendors like HP, Dell, IBM, Brocade and Juniper copy a “trivial” amount of Cisco code to offer compatibility.

“There’s a difference between compatibility and copying,” says Chandler. “None of (Arista’s CLI features) are industry standard. The overlap from others is trivial.”

Arista is also alleging anti-competitive bundling practices by Cisco for imposing a SMARTnet “tax” on customers implementing a multivendor network. SMARTnet renewals are at normal prices for an all-Cisco network; but a penalty is imposed on those also incorporating switches and routers from competitors, Arista charges.

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