After the U.S. International Trade Commission ruled Arista infringed three of Cisco’s patents with its ethernet switches used in computer data centers and servers, network equipment maker Cisco Systems Inc won a key victory in a sprawling legal battle with rival Arista Networks Inc

A finding of infringement by a U.S. trade judge was upheld by the trade commission in February. An import ban against Arista’s products that infringe the patents was also recommended by the ITC which investigates complaints of violations of U.S. intellectual property.

The U.S. Trade Representative, who can approve or disapprove of the commission’s orders, must now review the ITC’s ruling. While Cisco was unchanged, Arista was down more than 3 percent to $71.50 in after-hours trading.

Managing and securing communications networks are the areas of Cisco’s patents. Seeking a ban on Arista’s switches, the company filed its trade complaint in December.

The exclusion of Arista’s 7000 series of switches could be the result of the ruling if it is approved. According to regulatory filings, Arista’s 7000 series of switches generate most of the company’s product revenue.

It redesigned the software in its switches to address the ITC’s findings, Arista has said. Arista has not presented its purported redesigns to the ITC, Cisco says.

“This marks the end of Arista’s ability to mislead its shareholders and customers about the infringing nature of their products,” Cisco senior vice president Mark Chandler said in a statement.

It intends to comply with the orders, Arista said. Cisco was using litigation to preserve its market share, said the company’s senior vice president Marc Taxay n a statement.

“If allowed to succeed, Cisco’s scheme would have a chilling effect on innovation. While we will defend our rights in these actions, our primary focus remains on the continued supply of products to our customers,” he said.

Arista was founded by former Cisco employees and the trade action is one front in a fierce legal battle between the two companies. A judge is scheduled to release the findings in a pending case against Cisco which is a second trade-related case, in August.

This is not the first time that the two companies have filed and fought cases against each other in court. Both the California based companies have sued each other in federal court in San Jose.

The validity of several Cisco patents has been requested to be reviewed by the U.S. Patent and Trademark Office by Arista. Companies frequently turn to the ITC to win an import ban and to district court to win damages.

The case is In the Matter of Certain Network Devices, 337-944, at the U.S. International Trade Commission.

(Adapted from Reuters)

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