Mighty Cisco sues upstart Arista
A few months before taking her company public this summer, Arista Networks (ANET) CEO Jayshree Ullal told Fortune she’d never compete in a “conventional way” against Cisco (CSCO), where she worked for more than a decade. Having built Cisco’s enterprise business, she said, “it would take me 15 years and 15,000 engineers, and that’s not a recipe for success.”
Cisco, whose stock has been stuck forever but whose market value exceeds $140 billion, has decided that not only is pesky upstart Arista competing against it but that Arista is doing so with Cisco’s technology. Cisco filed suit Friday against Arista for patent and copyright infringement, alleging that Arista has copied everything from Cisco product features to the language in Cisco’s operating manuals, typos and grammatical errors and all. “Our success is built on using our innovation engine to lead in the marketplace,” Cisco General Counsel Mark Chandler wrote in a company blog post provided Thursday to Fortune. “Our action today is based on the principle that to compete in technology, you need to innovate, not copy.”
Arista responded with statement saying it hadn’t yet evaluated the lawsuit in detail. But it did take a swipe at Cisco’s decision to take the dispute to court. “While we have respect for Cisco as a fierce competitor and the dominant player in the market, we are disappointed that they have to resort to litigation rather than simply compete with us in products,” Arista said.
Ullal twisted the knife a little deeper with a brief personal response: “It’s not the Cisco I knew”
At less than $5 billion in marke value, Arista is tiny in comparison to Cisco. But its lineage–and language–bothers the behemoth. Ullal in fact built a major Cisco business and was central to its growth from a small company itself to the industry powerhouse it became. Ullal left Cisco in 2008 after 15 years and subsequently joined Arista, which was co-founded by Andy Bechtolsheim, a Sun Microsystems pioneer who made another fortune as an early investor in Google.
In his post, Chandler accuses Arista of four sins: incorporating Cisco features that are not industry standards; marketing those features; promoting its ability to copy Cisco as a way of increasing Arista’s value; and emboldening competitors to follow suit. Cisco compares Arista’s treatment of its product features with a host of other competitors, including HP, Brocade, Alcatel-Lucent, Juniper, and Extreme, and finds that while each competitor borrows a bit from the leader, no one compares in its brazenness to Arista. “These formidable competitors have innovated on their own, rather than copy, to create value and interoperability for their customers,” writes Chandler. (It’s also worth noting that before its IPO, Arista offered to allow me to purchase shares in the offering, which I wrote about here. I did not accept the offer.)
In its patent suit, Cisco said it seeks “injunctive relief and damages,” which it didn’t specify. In other words, it wants a judge to force Arista to stop using its technology and to throw some cash Cisco’s way as well. Arista may not have intended to compete in a conventional manner against Cisco. It’s now facing a response to having thumbed its nose at Cisco that is altogether conventional.
(This story was updated with a response from Arista)