- Two days before an ITC administrative law judge (ALJ) issues an opinion on a Cisco (NASDAQ:CSCO) infringement suit against data center switch rival Arista (NYSE:ANET), Arista has filed an antitrust suit against Cisco, alleging the company engaged in a "bait-and-switch" tactic related to the command-line interface (CLI) commands used for programming its switches and routers.
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Arista argues Cisco encouraged industry adoption of its CLI commands (helping turn them into an industry standard), and then asserted copyright protection to hurt rivals. "Until December 2014, Cisco never suggested that it claimed copyright protection in the set of functional commands that most of the industry uses. This litigation is not about protecting copyrightable expression in commonly used CLI commands ... this litigation is an effort to debilitate a company that is disrupting Cisco’s long-standing dominant position in this market with better technology."
- In addition, Arista alleges Cisco illegally raised prices for Smart Net service and support contracts for customers using rival hardware in tandem with Cisco's. Cisco, for its part, declares Arista's suit to be "a smokescreen to divert attention from the important ruling expected from the ITC later this week," and "a pretext to delay the CLI District Court case scheduled for November."
- Arista fell hard in September after the ITC staff concluded (ahead of the ALJ's ruling) the company infringed Cisco's IP. This week's ALJ ruling will likely be followed by a decision from the ITC commission later in 2016. An ALJ is set to rule on a separate Cisco suit against Arista on April 26, and a federal Cisco suit against Arista has been put on hold pending the outcome of the ITC cases.
- Arista fell 6.9% today amid a 1.6% Nasdaq drop. Cisco fell 0.9%.