Cisco (CSCO) recently lost a copyright case to Arista (ANET). But the loss came only a few days after Cisco won a major victory in a patent infringement dispute against its arch rival. In the latest case, a federal court in California decided in favor of Arista concerning Arista’s command line interface (or CLI) software. Cisco claimed Arista copied its CLI and sued for that, but the jury sided with Arista that it used CLI fairly. That ruling means that Arista can now escape the $335 million fine that Cisco sought in damages.
Cisco has stepped up its legal fight against Arista at a time when the rival is stealing its market share and talents. Arista reported $290.3 million in revenues last quarter, up from $217.6 million a year earlier. But Cisco reported revenue of $12.4 billion in the last quarter, down from $12.7 billion in the comparable period last year. Arista is gaining what Cisco has lost, and Cisco isn’t amused.
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Arista has also robbed Cisco of star employees. Arista CEO Jayshree Ullal and co-founder Andy Bechtolsheim previously worked for Cisco.
However, Cisco has more bones to pick with Arista. Recently Cisco won a high-profile patent infringement case decided by the International Trade Commission (or ITC). Arista was found to be in violation of two Cisco patents relating to controlling routing and switching systems. Earlier, ITC found Arista guilty of violating certain Cisco patents, and thus banned Arista products containing the offending technologies. Arista had to rework its products to remove the disputed technologies before they could enter the US from offshore manufacturing sites.
Cisco believes that challenging Arista will bear fruits for its shareholders because a ban on Arista products will likely lift its sales. But outside Arista, Cisco still faces competition from Juniper (JNPR), Dell Technologies (DVMT), Brocade (BRCD), and Extreme Networks (EXTR), among others.