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Arista Networks, Inc., v. Cisco Systems, Inc.

Arista Networks, Inc. and Cisco Systems, Inc. entered into a binding agreement that will result in the dismissal of all pending district court and ITC litigation between the parties and a five-year stand-down period for any future patent infringement claims either may have against the other, in return for a $400 million payment from Arista to Cisco. Arista’s stock price jumped 5.4% on the announcement. The settlement will end customer uncertainty raised by the various lawsuits.

In 2014, Cisco sued Arista for patent and copyright infringement related to Ethernet switches and their “command line interface” (CLI). In 2016, Arista countersued Cisco for antitrust violations, alleging that Cisco’s reversal of its long-standing policy of recognizing and encouraging industry usage of its switch CLI commands represented anticompetitive conduct that maintained its monopoly power in Ethernet switches and high-speed Ethernet switches.

Supporting expert Dr. Fiona Scott Morton, Theodore Nierenberg Professor of Economics at Yale School of Management, Bates White worked on behalf of Arista to evaluate the effect of Cisco’s alleged conduct on the Ethernet switch market. The analysis evaluated the impact of Cisco’s copyright lawsuit and associated industry communications on the industry and consumers of Ethernet switches, assessed the impact of these actions on Arista’s sales, and calculated associated damages to Arista. Bates White supported Dr. Scott Morton’s expert report and deposition testimony and assisted lawyers in responding to several legal motions related to the economics testimony.

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