Federal Circuit Flash Digest – Cisco v. ITC: Fed. Circuit Upholds Limited Exclusion Ban on Arista Switches

Federal Circuit Flash Digest First Amendment

Cisco Systems, Inc. v. International Trade Commission, No. 2016-2563, 2017 WL 4654894 (Fed. Cir. Sept. 27, 2017).

Last month, in Cisco Systems, Inc. v. International Trade Commission, No. 2016-2563, 2017 WL 4654894 (Fed. Cir. Sept. 27, 2017), the Federal Circuit affirmed an International Trade Commission (“ITC”) limited exclusion order banning entry of certain Arista network switches, including related software and components, into the United States. The operating systems of these switches were found to infringe on three Cisco patents. The Court also upheld the ITC’s finding that Arista had not infringed two other patents Cisco had included in its original complaint.

The case stems from a Section 337 investigation initiated by the ITC in January 2015 in response to Cisco’s allegations that Arista violated six of its patents. An Administrative Law Judge (“ALJ”) found that Arista’s software had infringed on three of those patents, and found no infringement on two others. One of the patents, ‘296, had been removed from the investigation prior to the ALJ’s final determination. The ITC upheld the entirety of the ALJ’s final determination and issued the exclusion order in response.

This case is a consolidation of both Arista’s appeal and Cisco’s cross-appeal of the ITC’s final determination. Arista appealed both the ITC’s claim construction of Cisco’s ‘537 patent and the scope of the limited exclusion order. In its final determination, the ITC had found that the system of data management used by the operating system running on certain Arista network switches was in violation of Cisco’s ‘537 patent. Id. at 10. The Federal Circuit upheld the ITC’s claim construction of the ‘537 patent and the scope of the limited exclusion order, which applies to the individual components of the infringing network switches as well as the fully assembled products and the software that runs on them. Id. at 14. This holding will stop Arista from circumventing the exclusion order by assembling the switches domestically from individually imported components. Cisco cross-appealed the ITC’s final determination that the software used by the Arista switches was not in violation of Cisco’s ‘597 patent, which describes a logging module used for network security. The Federal Circuit upheld the ITC’s non-infringement finding, holding that Arista’s system could only infer the binary status of a subsystem if a change had occurred, while Cisco’s patent was for a system that could detect the precise nature of a configuration change in a subsystem. Id. at 15.

As Bonnie Eslinger of Law360 explains, a central issue in this case is that, on May 25, 2017, the Patent Trial and Appeal Board (“PTAB”) invalidated two of the originally disputed Cisco patents. The ITC stated this development had no effect on their review process, because Cisco had yet to exhaust its appeals with the PTAB. Prior to the Federal Circuit’s decision in this case, both HPs, Vizio, and others filed an amicus brief urging the Court to stay the exclusion order in the interest of fair competition until the PTAB made its final determination. 

Sean Rail is a 1L student at Harvard Law School.