One suit is for patent infringement, which charges Arista with violating 14 Cisco patents for 12 features in the Arista EOS operating system. The second suit is for extensive copying of Cisco's user manuals and command line structures, right down to the grammatical errors within them.
"This is not an accident but a strategy," says a source familiar with the matter. "It was a deliberate, brazen and blatant intellectual property violation in order to gain competitive advantage in the marketplace. Arista's shortcutting to get to market and win share."
According to a blog posted by Cisco General Counsel Mark Chandler, Cisco has only sued a competitor less than a handful of times in the last 13 years.
Patent infringement
In Chandler's blog post, Cisco identified 12 product features covered by 14 patents that Arista is said to have violated. "None of the implementations are incorporated in industry standards," Chandler writes. "They were patented by individuals who worked for Cisco and are now at Arista, or who at Cisco worked with executives who are now at Arista. These Cisco-created features and implementations are incorporated by Arista in their entirety into Arista's products."
Arista, which went public in June, was founded by former Cisco employees, many of whom are named inventors on Cisco's networking patents, the suit states. Among others, Arista's founders, President and CEO, Chief Development Officer, Chief Technology Officer, Senior Vice President for Customer Engineering, Vice President of Systems Engineering and Technology Marketing, Vice President of Hardware Engineering, Vice President of Software Engineering, and Vice President of Manufacturing and Platform Engineering.
"Notably, Arista was founded by former Cisco employees who were intimately and directly familiar with Cisco's patented networking technologies, including those protected by patents asserted in this action," the suit states. "Two of Arista's founders, Andreas Bechtolsheim and David Cheriton, developed patented technologies while at Cisco. While each has had a long career in the networking and computing fields, they are each named inventors on a number of the Cisco patents asserted in this case. Messrs. Bechtolsheim and Cheriton are aware of Cisco patents on which they were named inventors and that they developed while employed by Cisco."
Also, four out of the seven members of Arista's Board of Directors were previously employed by Cisco, the patent infringement suit states.
"Arista's goal is to sell networking products. Rather than building its products and services based on new technologies developed by Arista, however, and providing legitimate competition to Cisco, Arista took a shortcut by using innovative networking technologies designed, developed, and patented by Cisco," the suit states.
The Chandler blog goes on to say that "Arista incorporates features knowing that Cisco holds intellectual property rights related to those features, all of which are Cisco proprietary and none of which are industry standards," and that "Arista intentionally markets those features to its customers as a basis for buying the products" and to "convince investors to finance the company."
The infringement claim includes Arista's EOS "secret sauce" -- the central database, or SysDB, that maintains system state -- which Cisco says violates a Cisco patent issued in early 2007.
Other patents Cisco claims Arista violated pertain to key features across Arista's entire switching portfolio, including in-service software upgrades, zero touch provisioning, access control lists, multi-link aggregation and private VLANs.
Copyright
Cisco first noticed the alleged violations last winter when Arista started making claims about the appeal of the EOS command line interface to those trained on Cisco gear, one source says. Cisco claims that, of Arista's 1,200 multi-word CLI commands, 500 are exact copies of Cisco commands, the source says.
"No competitors have more than 100" commands in common with the Cisco CLI, the source says. "Even Juniper has only 28 (in common) and Extreme 30."
Many of the statements that triggered Cisco's suspicion came from Arista President and CEO Jayshree Ullal and CTO Kenneth Duda, both former Cisco employees.
According to the Chandler blog, which cites published articles in periodicals including Network World, Ullal said:
* "Since I helped build the enterprise [at Cisco], I would never compete with Cisco directly in the enterprise in a conventional way. It makes no sense. It would take me 15 years and 15,000 engineers, and that's not a recipe for success."
* "[A] Cisco CCIE expert would be able to use Arista right away, because we have a similar command-line interface and operational look and feel. Where we don't have to invent, we don't."
* "The secret-sauce of Arista's EOS is a multi-process state-sharing architecture. EOS defines its state using central database (Sysdb) that holds and validates all system state and propagates updates to the agents. . ."
And CTO Duda is alleged to have said: Arista has learned to "[p]rovide familiar interfaces to ease adoption" including a "standard CLI that ... retains familiar management commands" so much so that "80% [of Arista customers] tell us they appreciate the way they can leverage their deep [Cisco] IOS experience... Familiar management interfaces, standard CLI ... It's been very helpful for our customers to be able to rapidly adopt our products and integrate them into their environments ... that our switches provide a familiar management interface so their existing tools and processes, screen scraping, automation, continue to work just as they did before."
For the alleged patent infringement, Cisco is seeking an injunction and damages from lost profits "in an amount not less than reasonable royalty," according to the suit. Cisco is also seeking damages "in an amount not less than three times" the damages assessed for Arista's patent infringement.
For the alleged CLI copyright infringement, Cisco is seeking an injunction, lost profit damages, statutory damages, and reimbursement of legal fees, expenses and costs.
The case will be heard in the United States District Court in the Northern District Court of California.
Cisco complaints come as Arista is entangled in another suit with cofounder David Cheriton and his company, OptumSoft, over a compiler used in EOS that Arista licensed royalty-free from OptumSoft. OptumSoft is claiming ownership of "improvements, corrections or modifications to" the compiler, as well as any "derivative works thereof, made by or for" Arista involving it, such as EOS.
Arista is countersuing, and recently replaced its legal representation in the OptumSoft case.
Cisco's suits come two days after expiration of the 180-day lockup period on Arista, the time in which company insiders are prohibited from selling shares immediately following an IPO. If insiders, which own roughly 53 million shares, flood the market with Arista stock it may cause a significant decrease in its value, according to this post by DRD Investments.
For the quarter ended Sept. 30, Arista posted revenue of $155.5 million, an increase of 53% compared to the third quarter of 2013, and an increase of 12.7% from the second quarter of 2014. For the fourth quarter, the company expects revenue between $160 million and $168 million.
Arista's market cap is $4.73 billion.