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08.07.18

Arista Shows How ITC Injustice (Embargo Before Facts Are Even Known) Harms Smaller Businesses, Helps Monopolists

Posted in America, Patents at 1:06 am by Dr. Roy Schestowitz

Fiasco Cisco

Summary: Arista Networks Inc. (Arista) has just given up, but only after years of legal bullying from Cisco, which imposed embargoes using questionable patents that should never have been granted by the USPTO

Cisco’s history as somewhat of a patent parasite is well documented here. Cisco fired its lawyer who had combated patent trolls (after unmasking by a monster, Ray Niro).

Sadly, patent bullying by Cisco pays off as Arista basically surrenders. It’s not a new fight; in fact, we wrote about it recently as it was causing financial trouble and technical problems. The Patent Trial and Appeal Board’s (PTAB) inter partes review (IPR) led to invalidation of a key USPTO-granted patent (demonstrating the dangers of low-quality patent assessment), but the ITC simply ignored that ruling. Amazing! And then the stock/share price crashed (see yesterday’s article “Arista Networks: Waiting For A Breakout”).

“Sadly, patent bullying by Cisco pays off as Arista basically surrenders.”So after all this injustice Arista decided to just shell out a lot of money. As the Wall Street Journal put it, “Arista Networks Inc. agreed to pay Cisco Systems Inc. $400 million as part of a settlement that resolves much of the litigation between them.”

There has been lots of press coverage since, e.g. [1, 2, 3, 4, 5, 6].

“Patent maximalism is a disease and its main contribution is contribution to monopolisation, or protectionism of the giants.”This isn’t justice; this isn’t even peace or truce but a surrender. To make matters worse, no potent defense exists against such abuse (legal bullying), not even aggregators which in practice perpetuate the injustice rather than properly tacklem it; Just promoted in a press release [1, 2] titled “Peer Mountain Joins The Google-founded LOT Network”:

Peer Mountain joins the LOT Network as its 259th member. The License On Transfer (LOT) Network is a non-profit community of companies providing the protection from patent assertion entities (PAE’s), commonly known as patent trolls. Companies that join the LOT Network, pledge to give all other members an automatic free license to any of their patents that is acquired by a patent assertion entity.

Like what? Cisco? They speak of “patent trolls”, but what exactly can they do with a pile of patents against classic patent trolls? Nothing. And what is LOT Network anyway? Almost a cartel.

But our principal complaint is that in Cisco v Arista what we continually saw was systematic injustice in the form of sanctions — something which the EPO hoped to imitate in UPC (before its demise). Patent maximalism is a disease and its main contribution is contribution to monopolisation, or protectionism of the giants. Cisco claims that it supports PTAB, but it certainly didn’t seem to mind when PTAB met defiance from the ITC.

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