Cisco findings sink Arista stock

ITC staff recommends court rules rival infringed on three Cisco patents

Arista reportedly suffered a setback in its litigation with Cisco that caused its stock to drop almost 6% this week. According to Investor’s Business Daily, International Trade Commission attorneys determined Arista infringed on three Cisco patents, causing the company’s stock to drop 5.6% Thursday.

Arista stock dropped 11% today on the findings.

Cisco filed suit against Arista back in December, claiming copyright and patent infringement. Suits were filed in both federal court and the ITC.

The ITC action was intended to block Arista from importing and selling products in the United States that Cisco alleged infringed on its patents. It was an attempt to expedite the injunction of Arista product while Cisco patent and copyright infringement suits against the company wind their way through the court.

In July, a federal judge dismissed Cisco’s indirect infringement claims against Arista, a complaint that accompanied a patent and copyright infringement case. Just after this claim, Arista introduced its EOS+ operating system and Cisco then amended its claim to demand extra penalties for “willfulness” infringement.

The judge then ordered Cisco to amend its claim to make a stronger case that EOS+ was a new product and not a new version of an existing product.

Cisco provides an update on all of the litigation with Arista here. Here is Arista’s statement on the ITC ruling and on the cases overall:

Arista is proud of its achievements, namely building EOS from the ground up from a clean sheet of paper. It is apparent to all that Cisco has engaged in this targeted effort against Arista not out of concern for its intellectual property but rather as a means to protect the dominant market position it’s enjoyed for more than two decades.

We continue to believe that we do not infringe the remaining patents asserted and that they are not valid. Our key intellectual property (EOS) remains unaffected. We look forward to presenting our case to the ITC. Regardless of outcome, our customers are our top priority and our goal is to ensure the continued supply of our

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