Arista to pay $400 mn to switch market leader Cisco to resolve court fight

Arista Networks said it will pay $400 million to bigger rival Cisco Systems to resolve a US court fight between the two network equipment makers, ahead of a jury trial in the dispute, Reuters reported.
Switch vendor market share Q1 2018
The settlement resolved U.S. lawsuits filed by Cisco alleging Arista copied its intellectual property.

Cisco is the leading vendor in the global switch market. Arista has third position in the switch market behind Cisco and Huawei

The deal also called for Arista to drop a lawsuit alleging Cisco engaged in anticompetitive conduct to preserve its dominant share of the ethernet switch market. The jury trial in that case was set to begin on Monday in San Jose, California.

Founded in 2004 by former Cisco engineers, Arista has emerged as a rival to Cisco in the multibillion-dollar market for ethernet switches used in data centers.

Cisco sued Arista in 2014, alleging it brazenly copied software that runs switching products and other technology protected by patents and copyrights. Arista has denied the allegations and accused Cisco of a smear campaign intended to stifle competition.

The US International Trade Commission ruled in 2016 that Arista infringed three patents and recommended a limited ban on Arista’s products that infringe the patents.

Arista said that in an effort to comply with the ITC’s ruling it redesigned its technology to remove elements found to infringe Cisco’s patents.

Arista scored a major victory of its own in 2016, when a U.S. jury said it owed no damages over Cisco’s claims of copyright infringement.

The settlement came shortly before a trial in a 2016 antitrust lawsuit filed by Arista. It alleged Cisco permitted rivals to use its interface technology and then later, after they were locked into using it, claimed copyright protection on it.

Cisco denied the allegations in court filings, saying it never encouraged Arista to adopt its technology and that it acted reasonably in suing for copyright infringement.

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