General
August 6, 2018
4 minutes read

Arista networks reaches $400 million settlement with Cisco after long standing court battle

image credit : Arista Cloud networking company Arista Networks has reached a settlement deal with networking giant Cisco agreeing…

image credit : Arista

Cloud networking company Arista Networks has reached a settlement deal with networking giant Cisco agreeing to pay the sum of $400 million as stated in its regulatory filings to the company ending a series of court battles which began in 2014 with several allegations from both sides.

Arista notably founded by serial entrepreneurs, Professors and early Google investors David Cheriton and Andy Bechtolscheim along with Kenneth Duda was hit with a lawsuit from its competitor Cisco 4 years ago with allegations that Arista had frequently made use of its intellectual property for its operations with Arista later hitting back accusing Cisco of being a monopoly due to its dominant position in the Ethernet switch market.

Both companies stated of this settlement demonstrating “their commitment to the principles of IP protection.” in a released joint statement.

The U.S. International Trade Commission (ITC) ruled 2 years ago that Arista infringed on 3 patents with a recommendation of a limited ban on the products limited to the patents.

The court battle which has long been a major issue for the company now being settled counts as a plus for the company which has seen its stock jump about 5% in trading today.

In an effort to comply with the ITC’s ruling, Arista is also redesigning its technology with the removal of components found to be in infringement of Cisco’s patents.

Both companies were due to appear at a jury today but took the part of a monetary settlement.

Also notable is the fact that Arista’s 10 year running CEO Jayshree Ullal was previously an executive at Cisco holding the title of Senior Vice President of Data Center & Switching and reporting to then CEO John Chambers and having spent 15 years at the company.

Arista which went public June 2014 currently trades at around $271 a share giving the company a value north of $19 Billion in the stock market and also marking a great jump from its $2.75 Billion IPO valuation.