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Cisco patent infringement avoided, new Arista OSes OK to import

Federal officials have cleared Arista's newer switches for importation to the U.S. after trade officials found older Arista products in violation of three Cisco patents.

Federal officials have cleared Arista's newer switches for importation to the U.S. The products were OK'd for import following a trade commission's ruling that older Arista products violated three Cisco patents.

In a letter sent to Arista, the U.S. Customs and Border Protection agency told the company that newer versions of the Extensible Operating System (EOS) were "not within the scope of the limited exclusion order" issued by the U.S. International Trade Commission (ITC). The finding covered versions of the switch OS starting with 4.16, Arista said in a recent filing with the Securities and Exchange Commission.

"We appreciate the hard work and thoroughness of U.S. Customs and Border Protection in reaching this decision, which validates our good-faith efforts to address the ITC's findings," Arista general counsel Marc Taxay said in a statement. "We look forward to resuming the importation of our redesigned products into the United States."

In June, the ITC upheld a U.S. trade judge finding that Arista products with older versions of EOS infringed on three Cisco patents related to managing and securing communication networks. As a result, patent-infringing products were banned from importation.

The trade judge's ruling and the ITC's decision had cast a shadow of uncertainty over Arista. The company countered the negative rulings by assuring customers the redesigned EOS would be free of technology listed in Cisco's patent-infringement suit. Arista has countersued Cisco, alleging unfair competitive practices.

Arista sales grow

Despite the rulings, Arista reported in early November that revenue for the quarter ended Sept. 30 increased 33% year over year to $290 million. Net income rose to $61 million from $42 million.

In a conference call with financial analysts, Arista CEO Jayshree Ullal said the company had gained market share, despite the legal tussle over Cisco patents. "We still talk about share gain, not share loss, so I hope that's our trend," Ullal said in a transcript of the call published by the financial site Seeking Alpha.

If there were any damages from the rulings, then it would have been "modest," said Brad Casemore, an analyst at IDC. "But I have not seen evidence that Arista was affected meaningfully by the importation ban."

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