Arista Settles Cisco’s Patent Claims for $400M

Arista Networks has agreed to pay Cisco Systems $400 million as part of a settlement of litigation that has pitted the two computer networking companies against each other for nearly four years.

In return for the payment, Cisco will drop all its pending patent infringement claims against Arista. The settlement also resolves Arista’s antitrust claims against Cisco that were scheduled to go to trial on Monday.

“Cisco and Arista have come to an agreement which resolves existing litigation and demonstrates their commitment to the principles of [intellectual property] protection,” the companies said in a joint news release.

As Reuters reports, Arista, which was founded in 2004 by former Cisco engineers, “has emerged as a rival to Cisco in the multibillion-dollar market for ethernet switches used in data centers.”

Cisco launched the first legal salvo in 2014 by alleging Arista copied the “command-line interface” that is used to configure Cisco networking hardware and is protected by patents and copyrights. Arista countered that its rival violated antitrust law by encouraging the industry to use Cisco CLI commands as a standard and then suing companies that embraced the standard.

“Despite knowing for years that Arista and other competitors had adopted Cisco-like CLIs, prior to 2014 Cisco made no statements that asserted intellectual property or other proprietary rights in the Cisco CLI itself,” Arista alleged.

A jury in 2016 ruled Arista owed no damages for copyright infringement. Cisco’s appeal of that decision is not affected by the settlement.

“As part of this agreement, Arista will be making a $400 million payment to Cisco, is committed to maintaining the product modifications it made as a result of previous rulings, and will be making limited changes to further differentiate its user interfaces from Cisco’s,” the companies said.

Cisco and Arista also agreed not to sue each other for five years over “any utility patent infringement claims either may have against features currently implemented in the other party’s products and services” and to resolve any disputes “over new and/or modified features in the other party’s products” through arbitration for the next three years.