More reports on: Telecom

Cisco loses copyright battle with Arista Networks

15 December 2016

Arista Networks Inc scored a major win over Cisco Systems Inc, with a US jury yesterday ruling that Arista owed no damages over Cisco's claims of copyright infringement.

Arista Networks is a computer networking company with its headquarters in Santa Clara, California. The jurors also ruled in federal court in San Jose, California that Arista did not infringe a Cisco patent.

The verdict comes as the latest in a protracted litigation between San Jose-based Cisco, a major networking equipment company, and its fast-growing rival. The companies are competitors in networking gear including ethernet switches that connect computers, servers and other devices, forming networks.

Cisco, which had claimed $335 million in damages over Arista's alleged copyright infringement of its user interfaces, said in a statement that it "respectfully disagreed with the verdict" and was exploring options for post-trial motions and appeal.

Arista said the outcome "represents an important victory not only for Arista but for the entire industry," Reuters reported.

Arista shares rose 3 per cent while Cisco shares were down 0.4 per cent at close.

Cisco is fighting to hold on to its position as a dominant market player, as it seeks to ward off its rival founded by former top Cisco executives. Arista's annual revenue had shot 43 per cent since 2014, the year it went public, to $837 million at the end of 2015.

The jury found Arista had copied some of Cisco Command Line Interface but declined to award damages.

''We would like to thank the jurors and [US District Court Judge Beth Labson] Freeman for their tireless efforts. Today's verdict represents an important victory not only for Arista but for the entire industry,'' said Marc Taxay, senior vice president and general counsel of Arista.

Cisco senior vice president, general counsel Mark Chandler, disappointed with the verdict,  said in a blog post, ''I can't pretend not to be disappointed that a jury in federal court, having found that Arista copied Cisco's user interfaces and that the copying was not justified by the fair use doctrine, applied the little known principle of scènes à faire to deny Cisco relief for Arista's action.

"In laymen's terms, justification by applying scènes à faire means the jury excused Arista's copying because they believe that 'external factors' dictated the selection and arrangement of some infringed features. We believe they misapplied, or misunderstood, this narrow doctrine developed to make sure copyright infringement  does not extend to using commonplace elements from literary works such as a plot device, a character or a setting.''

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