CBP Finds Arista Product Redesign Successfully Avoids ITC Patent Scope

Customs and Border Protection ruled a redesign of network switches imported by Arista Networks falls outside of an International Trade Commission limited exclusion order (LEO). The CBP ruled in favor of Arista, which is in litigation with Cisco over patent infringement allegations. The ITC began a formal Tariff Act Section 337 enforcement investigation in October after Cisco filed a complaint that Arista ignored the LEO, which prohibits imports of patent-infringing products (see 1610040060). Based on CBP's highly technical review of the Arista switches and the patents at issue, the agency said "the infringing functionality has been removed and that Arista has carried its burden to establish that the articles in question are not covered by the patents at issue and therefore do not, on this basis, fall within the scope of the LEO." The decision "validates our good-faith efforts to address the ITC’s findings," said Arista General Counsel Marc Taxay in an emailed statement. "We look forward to resuming the importation of our redesigned products.” CBP "issued instructions to the U.S. ports to permit entry of the Company’s redesigned products for consumption and sale in the United States," Arista said in a Nov. 21 SEC filing. This week, Cisco said it remains concerned with redesigned products imported by Arista, noting the first company's CBP complaint said "'the claim of a workaround is a thin veil to cover Arista’s ongoing infringement and convince its customers, many of whom have strongly supported protection of intellectual property rights, that they are buying a product that is non-infringing,'” emailed a spokesman. "The enforcement case continues with an initial ruling expected in June 2017 and the ITC is not bound by the customs decision.”