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Arista, Cisco agree to stop patent suits for five years

The Arista-Cisco agreement includes Arista paying $400 million to end their patent infringement dispute. The companies also agreed to a lawsuit moratorium on existing products.

Cisco and Arista Networks have settled their patent infringement dispute with Arista agreeing to pay its rival $400 million as part of a settlement of the four-year-old legal battle.

The companies agreed this week that with limited exceptions, no new litigation would be brought "over patents or copyrights related to existing products for five years," according to a joint statement. Also, the rivals said they would use an arbitration process for three years to address patent disputes regarding new products.

For customers of the two combatants, the Arista-Cisco settlement was good news, even if it came "somewhat belatedly," said Brad Casemore, an analyst at IDC. "For customers, it's always beneficial when they can concentrate solely on their business needs and technical requirements rather than having to concern themselves with the potential permutations and vagaries of patent litigation."

In 2014, Cisco sued Arista claiming the company infringed upon 14 patents, including those covering commands within Cisco's widely used command-line interface (CLI) for switches. Arista denied the claims, accusing Cisco of using the courts to dampen Arista's fast-growing data center switching business.

Under the Arista-Cisco agreement, Arista said it would maintain the product modifications it made as a result of previous court rulings, including earlier changes to commands used in its CLI. The company also agreed to make other "limited changes" to differentiate further its CLI from Cisco's product.

Arista-Cisco settlement benefits both sides

Of the 14 patent infringement claims, the courts invalidated 12. The International Trade Commission later issued a ban preventing Arista from importing products with the original CLI. Arista had appealed the ITC ruling, but legal experts did not expect the commission to reconsider the ban until after a final decision on the patent infringement suits.

The agreement removes the possibility of either side having to deal with unfavorable future rulings. For Arista, the settlement lifts any concerns customers may have had over the ITC ban.

Nevertheless, the companies plan to continue an appeal of a lower court jury verdict that found the commands Arista used from the Cisco CLI did not constitute patent infringement.

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