Repbcetton555sss.com

KIRKLANDELLISLLPANDAfFILIATEDPARTNERSHIPS655FifteenthStreet,N.
W.
Washington,D.
C.
20005D.
SeanTrainorToCallWriterDirectly:(202)879-5000Facsimile:(202)879-5229(202)879-5200d.
sean.
trainor@kirkland.
comwww.
kirkland.
comAugust26,2016BYIIAIN1)DELIVERYTheHonorableLisaR.
BartonSecretarytotheCommissionU.
S.
InternationalTradeCommission500EStreet,S.
W.
,Room112Washington,D.
C.
20436Re:IntheMatterofCertainNetworkDevices,RelatedSoftwareandComponentsThereof(I),ITCInvestigationNo.
337-TA-944DearSecretaryBarton:EnclosedforfilingonbehalfofComplainantCiscoSystems,Inc.
(''Complainant")arethefollowingdocumentsinsupportofComplainant'srequestthattheCommissioncommenceanenforcementproceedingpursuanttoCommissionRule210.
75(b)ofSection337oftheTariffActor1930,asamended,19U.
S.
C.
§1337.
Accordingly,Complainantsubmitsthefollowing:1.
Oneoriginalandnine(9)papercopiesofComplainant'snon-confidenlialVerifiedComplaint(includinganoriginalandnine(9)copiesofthiscoverletter),ofwhicheight(8)copiesarefortheCommissionandone(1)copyisforserviceontheProposedEnforcementRespondent.
2.
Two(2)copiesoftheaccompanyingnon-conlidentialexhibits,(1)copyisfortheCommissionandone(1)copyisforserviceontheProposedEnforcementRespondent.
RECEIVEDAUG262016OFFICEOFTHESECRETARYU.
S.
INTL.
TRADECOMMISSIONChicagoHongKongLondonLosAngelesMunichNewYorkPaloAltoSanFranciscoShanghaiUNITEDSTATESINTERNATIONALTRADECOMMISSIONWASHINGTON,D.
C.
IntheMatterofCERTAINNETWORKDEVICES,RELATEDSOFTWAREANDCOMPONENTSTHEREOF(I)InvestigationNo.
337-TA-944EnforcementProceedingENFORCEMENTCOMPLAINTOFCISCOSYSTEMS.
INC,COMPLAINANTRESPONDENTCiscoSystems,Inc.
170WTasmanDriveSanJose,California95134Phone:(408)526-4000AristaNetworks,Inc.
5453GreatAmericaParkwaySantaClara,California95054Phone:(408)547-5500COUNSELFORCOMPLAINANTStevenChernyKIRKLAND&ELLISLLP601LexingtonAvenueNewYork,NewYork10022Phone:(212)446-4800|Fax:(212)446-4900AdamR.
AlperSarahE.
PiepmeierAkshayS.
DeorasKIRKLAND&ELLISLLP555CaliforniaStreetSanFrancisco,California94104Phone:(415)439-1400|Fax:(415)439-1500MichaelW.
DeVriesKIRKLAND&ELLISLLP333SouthHopeStreetLosAngeles,California90071Phone:(213)680-8400|Fax:(213)680-8500D.
SeanTrainorKIRKLAND&ELLISLLP65515thStreet.
N.
W.
Washington,DC20005Phone:(202)879-5000|Fax:(202)879-5200DeannaT.
OkunPaulM.
BartkowskiAdduci,Mastriani&Schaumberg,LLP1133ConnecticutAvenue,NW,12thFloorWashington,D.
C.
20036Phone:(202)467-6300|Fax:(202)466-2006337-TA-944EnforcementComplaintTABLEOFCONTENTSI.
INTRODUCTION4II.
JURISDICTION.
8III.
COMPLAINANT.
8IV.
RESPONDENT.
9V.
THECOMMISSION'SISSUANCEOFALIMITEDEXCLUSIONORDERANDCEASEANDDESISTORDER.
9VI.
THEARISTAPRODUCTSATISSUE.
12VII.
EVIDENCEOFVIOLATIONOFTHECEASEANDDESISTORDER.
13VIII.
APPROPRIATERELIEF.
17l337-TA-944EnforcementComplaintLISTOFEXHIBITSExhibitNo.
Description1Arista'sQ42015EarningConferenceCall(October5,2015)2JayshreeUllalBlog,TheStateofTelemetryinCloudNetworking(August23,2016)3OppenheimerTechnology,Internet&CommunicationsConferenceTranscript(August9,2016)47050TXSeries10/40GDataCenterSwitchesDataSheet5NomuraMedia,TelecomandInternetConferenceTranscript(August16,2016)6AristaNetworks,Inc.
,Form10-Q(August4,2016)7CommissionOpinion8NomuraReport(June24,2016)9PacificCrestGlobalTechnologyLeadershipForumTranscriptInfrastructure,&Storage-CompanyUpdate(August8,2016)10AristaNetworkswebsiteadvertisementsforAristaswitches,capturedAugust24,201611CeaseandDesistOrder12CiscoSystems,Inc.
2014AnnualReport(September9,2014)13AssignmentRecordsforthe'537patent14CertifiedCopyofUnitedStatesPatentNo.
7,162,537('537natent)15OriginalComplaintfiledfor337-TA-94416NoticeofInvestigationfor337-TA-94417MinuteEntriesfromEvidentiaryHearingheldSeptember9,18InitialDetermination19LimitedExclusionOrder20JayshreeUllalLettertoCustomers(June27,2016)21ReceiptsofpurchaseofAristaProduct22PhotosofpurchasedproductofAristaProduct23U.
S.
PatentNo.
7,162,357InfringementClaimChart24ThirdPartywebsiteadvertisementsforAristaswitches,capturedAugust24,201625CowenTechnology,Media&TelecomConferenceTranscript(June1,2016)26Arista'sQ22016EarningsConferenceCall(August4,2016)27JMPSecurities-InternetSecurity,Communications(June24,2016)28BarclaysEquityResearch(June23,2016)29GoldmanSachsGlobalInvestmentResearch(June20,2016)30CustomsDocumentation31AristaNetworks,Inc.
Form10-K(February25,2016)li337-TA-944EnforcementComplaintExhibitNo.
Description32UnderstandingEOSandSysdb33AristaWhitePaper:EOS:TheNextGenerationExtensible34AristaEOS:AnExtensibleOperatingSystem35DebuggingEOSagents36AristaUserManual-EOSv.
4.
17.
OF(June29,2016)337-TA-944EnforcementComplaintI.
INTRODUCTION1.
1CiscoSystems,Inc.
("Cisco")bringsthisEnforcementComplaintbecauseAristaNetworks,Inc.
("Arista")isviolatingtheremedialordersoftheInternationalTradeCommission("theCommission"),whichwereenteredtoprotectCisco'spatentrightsanditssubstantialUnitedStatesdomesticindustryfromfurtherviolation.
DespitebeingadjudgedaninfringerbytheCommission,andbeingorderedtoceaseanddesistitsinfringement,AristacontinuestounlawfullyuseCisco'spatentedtechnology,announcingitsplans"tocontinuetheuninterruptedimportationofproducts.
"(Arista'sQ42015EarningConferenceCall,datedOct.
5,2015(Ex.
1)at6-7.
)Indeed,ontheverydaythattheCommission'sLimitedExclusionOrderandCeaseandDesistOrders(collectively,"Commission'sOrders")tookeffect—August23,2016—Arista'sPresidentandChiefExecutiveOfficer,JayshreeUllal,toutedonArista'swebsiteitscontinuingFoundtoWOrUoedVteteaty(ACMv*nDriven,RathTreeer,HeatthTracer)saleoftheSysDBtechnologytheCommissionalreadyfoundtobeinfringing:TheStateofTelemetryinCloudNetworkingpostedonAugust23,20f6byJayshreeUlta.
0SysDBFoundtoInfringeTriggeredWorkloadsCaptureWorkflows/WorkflowvtvOüity(VMTracer,ContainerTracer,Map-ReduceTracer)04kdockerOranuUrVintxkty(latencyAnalyzer.
DANZDateAnalyzer)ry|8+SSsj1*"vNEW!
Real-TimeStreamingjfesffX—"—ICapture,Str8BRepository,sjRepbcetton.
View1(Seehttps://www.
arista.
com/blogs/p=1356(excerptedandannotated),JayshreeUllalBlog,TheStateofTelemetryinCloudNetworking,datedAug.
23,2016(Ex.
2).
)4337-TA-944EnforcementComplaint1.
2AlthoughAristaclaimsthatithas"redesigned"itsproductstoavoidtheCommission'sOrders,AristaomitsthecriticalfactthatithasneitherrequestednorreceivedclearancefromtheCommissiontocontinuetoimport,market,orsellitsproductsintheUnitedStates—eventhoughitispresumedthatallofArista'sswitchproductsandcomponentsthereofareinfringinginanysuchproceeding.
Indeed,inArista'srecentsecuritiesfdings,AristaadmittedthatitssupposedredesignmaystillinfringeCisco'spatentedtechnology:IftheLimitedExclusionOrderandCeaseandDesistOrderarenotdisapprovedbytheUSTradeRepresentative,wewillneedtoremovefeaturesordeveloptechnicaldesign-aroundsinordertotaketheproductsoutsideofthescopeofanypatentfoundtohavebeeninfringedandthesubjectofaviolation.
Wemaynotbesuccessfulindevelopingtechnicaldesign-aroundsthatdonotinfringethepatentsorthatareacceptabletoourcustomers.
(SeeAristaNetworks,Inc.
,Form10-Q,datedAug.
4,2016(Ex.
6)at16.
)1.
3TestingofallegedlyredesignedproductslawfullyobtainedbyCiscofurtherdemonstratesthatArista'sproductscontinuetoincludeCisco'spatentedSysDBtechnology,andcontinuetoinfringetheU.
S.
PatentNo.
7,162,537("the'537patent").
(SeeinfraSectionVIII.
)II.
PRIORPROCEEDINGSANDORDERS2.
1OnDecember19,2014,CiscobroughtInvestigationNo.
337-TA-944onsixofitspatents,includingthe'537patentcoveringCisco'sSysDBtechnologies.
(OriginalComplaintfiledfor337-TA-944(Ex.
15).
)ThatinvestigationconfirmedArista'sintentionalcopyingandunauthorizeduseofCisco'spatentedtechnology,andtheimpropermeansbywhichAristatookthattechnologyfromCisco.
TheCommissionissuedaNoticeofInvestigationonJanuary21,2015,andafter14monthsoflitigation,AdministrativeLawJudgeShaw("ALJ")found,amongotherthings,thatArista'snetworkdevices,relatedsoftware,andcomponentsthereofinfringedclaims1-2,8-11and17-19ofthe'537patentandrejectedallofArista'sdefensesandotherexcusesforitsknowinguseofkeyCisco'stechnologies.
(Exs.
16-18.
)TheCommission5337-TA-944EnforcementComplaintaffirmedtheALJ'sinfringementfindingsonthe'537patent,findingthatArista'sactions"evince[]knowledgeandanintenttoinfringe.
.
.
notingthattheALJ"determine^]thattherewasevidenceofArista'ssubjectivebeliefthatitwasinfringingCisco'spatents.
".
(Comm'nOp.
(Ex.
7)at15,18.
)Moreover,theCommissionaffirmedtheALJ'sfindingthat"AristaintentionallyandwillfullyblindeditselfastoCisco'spatents,includingthe'537patentandthePVLANpatents,priortoitsknowledgeofitsallegedinfringement.
"(Id.
at18.
)TheCommissionissuedaLimitedExclusionOrderandaCeaseandDesistOrderonJune23,2016.
ThePresidentialreviewperiodfortheCommission'sOrdersconcludedonAugust22,2016.
AlthoughAristaundertookextensiveeffortstoconvincetheUnitedStatesTradeRepresentative("USTR")tointervene,theUSTRtooknoaction,allowingtheCommission'sOrderstogointoeffectonAugust23,2016.
2.
2Asnotedabove,AristahastoutedpubliclythatitwillcontinuesellingitsproductsthatincludethepatentedSysDBtechnologies,statingthat—notwithstandingtheCommission'sOrders—Aristaplans"tocontinuetheuninterruptedimportationofproducts,"claimingwithoutanyreviewthatitsproductsnowdonotinfringe,whichCisco'sanalysisshowstobeafalsestatement.
(Arista'sQ42015EarningConferenceCall,datedOct.
5,2015(Ex.
1)at6.
)And,asofthedateofthisEnforcementComplaint,AristaadmitsthatithasstockpiledimportedinventoryintheUnitedStatesandismarketingtheseproducts,whichCisco'sanalysishasconfirmedarestillinfringing,onitswebsiteandofferingthemforsale—inviolationoftheCommission'sOrders:Ithinkintermsofthinkingaboutourplansaswemovethroughtherestoftheyear,wehavebeenprettyconsistentinsayingthatwe'vetakensomestepsfromasupplychaininventoryperspectivetogiveussomeflexibilityasweworkthroughgettingcustomsapprovalonthedesignaroundsstrategy.
Ithinkthat,that'sstillthestrategy.
We'veseenusgrowtheinventorysignificantly.
WewillcontinuetodothatinQ3.
Allofthatistakentogiveusthatflexibility.
6337-TA-944EnforcementComplaint(ItaBrennan,Arista'sQ22016EarningsConferenceCall,datedAug.
4,2016(Ex.
26)at4.
)Thisprocessmaytake4-8months;inthemeantimeAristawillsupplycustomers(withproductbasedontheworkaround)viaanimpending$50-$100mninventorybuildandUSmanufacturingby4Q.
(NomuraReport,datedJun.
24,2016(Ex.
8)at1.
)Indeed,Aristaconfirmsinitssecuritiesfilingsthatithas$210Minnon-cancelablepurchasecommitmentsinQ3of2016relatingatleastinparttoitsimportedinventory.
(AristaNetworks,Inc.
,Form10-Q,datedAug.
4,2016(Ex.
6)at13.
)2.
3Assuch,Ciscoisforcedtobringthisenforcementproceedingtostop(a)Arista'scontinued,widespreadandunauthorizeduseofitspatentedtechnologies,(b)Arista'sinfringementofCisco'slawfulpatentrights,and(c)theongoing,acuteandirreparableharmtoCiscocausedbyArista'sdeliberate,unlawfulconduct.
Specifically,AristahasviolatedandcontinuestoviolatetheCommission'sCeaseandDesistOrderbymarketing,distributing,offeringforsale,selling,advertising,and/oraidingorabettingotherentitiesinthesale,and/ordistributionofimportedproductsorcomponentscoveredbyoneormoreofclaims1-2,8-11and17-19ofthe'537patent.
(AristaNetworkswebsiteadvertisementsforAristaswitches,capturedAug.
24,2016(Ex.
10).
)2.
4Arista'sactionshavecaused,andarecontinuingtocause,significantharmtoCisco,asallegedherein,byincorporatingCisco'spatentedtechnologiesintoArista'sproducts.
ThetechnologiesatissuewereinventedbyCiscopersonnel,areproprietary,andareimplementedbyCiscoinitsinnovativeproductsinordertosuccessfullycompeteinthemarketplace.
Ratherthaninvestinresearchanddevelopment,Aristatookashortcutbycopyinginnovativenetworkingtechnologiesdesigned,developed,andpatentedbyCisco,includingCisco's"SysDB"technology,coveredbythe'537patent.
Theseactionssignificantlyharminnovation.
Arista'scontinuedintellectualpropertyinfringement,inviolationofatleastthe7337-TA-944EnforcementComplaintCeaseandDesistOrder,stiflesinnovation,harmsdomesticindustryintheUnitedStates,andshouldbepenalizedtothefullextentoftheCommission'sauthority.
2.
5Accordingly,CiscorequeststhattheCommissioncommenceformalenforcementproceedingstoremedythecontinuingunlawfulactsofArista,and/oritsaffiliatedcompanies,parents,subsidiaries,orotherrelatedbusinessentities,and/oritsandtheirsuccessorsorassigns,inviolationoftheCommission'sJune23,2016CeaseandDesistOrder.
(Ex.
11.
)III.
JURISDICTION3.
1TheCommissionhasjurisdictionoverthismatterandtheproposedpartiespursuantto§§333and337oftheTariffActof1930,asamended,19U.
S.
C.
§§1333,1337and19C.
F.
R.
§210.
75.
IV.
COMPLAINANT4.
1CiscoisacorporationorganizedandexistingunderthelawsofCalifornia,havingitsprincipalplaceofbusinessat170WestTasmanDrive,SanJose,California,95134.
Ciscoisaleadingworldwidesupplierofnetworkingproducts,amongothers.
(SeeCiscoSystems,Inc.
2014AnnualReport,datedSept.
9,2014(Ex.
12).
)CiscohassignificantoperationsintheUnitedStates,includingwithrespecttoCisco's'537Patent.
CiscoisheadquarteredinSanJose,California,andhasresearch,development,testing,engineering,manufacturing,assembly,packaging,installation,customerservice,repair,productsupport,salesandmarketing,andbusinessofficesinover80UnitedStateslocations,employingabouthalfofCisco's70,000worldwideemployeesintheUnitedStates.
Ciscoinvestsbillionsofdollarsannuallyinresearchanddevelopmentfocusedoncreatingthefutureofnetworkingtechnologies.
Theseinvestmentsmakepossibleabroadrangeofproductsthatenableseamless,securecommunicationamongbusinessesofallsizes,institutions,telecommunicationscompaniesandotherserviceproviders,andindividuals.
AspartofitsITbusiness,Ciscosellsinnovativenetworkingproductsthat8337-TA-944EnforcementComplainttransportdata,voice,andvideowithinbuildings,acrosscampuses,andaroundtheworld.
AdditionalinformationconcerningCiscocanbeobtainedfromitsAnnualReportatExhibit12.
4.
2Ciscoistheownerbyassignmentofallright,title,andinterestinandtothe'537patent.
The'537patentisvalid,enforceable,andiscurrentlyinfullforceandeffect.
CertifiedcopiesoftherelevantassignmentrecordsareattachedatExhibit13.
V.
RESPONDENT5.
1AristaisacorporationorganizedandexistingunderthelawsoftheStateofDelaware,havingitsprincipalplaceofbusinessat5453GreatAmericaParkway,SantaClara,California95054.
5.
2Aristamarkets,distributes,offersforsale,sells,advertises,and/oraidsandabetsotherentitiesinthesale,and/ordistributionofnetworkingequipmentandcomponentsandsoftwaretherein,includingswitches,operatingsystems,andothersoftware,asfurtherdescribedinSectionVIIIbelow.
VI.
THECOMMISSION'SISSUANCEOFALIMITEDEXCLUSIONORDERANDCEASEANDDESISTORDER6.
1The'537patentisgenerallydirectedtoasystemandmethodformanagingdatainnetworkingdevices.
Inparticular,the'537patentconcernstheuseofsubsystems,oragents,toexternallymanagerouterconfigurationdatastoredinacentralizeddatabase,referredtoas"sysDB.
"Althoughprior-artsystemsusedacentralizeddatabase(sysDB)tostorerouterconfigurationdata,noneallowedthesubsystemstomanagethedata.
Thesystemofthe'537patent,ontheotherhand,allowssubsystemstoremainmodularandindependentthroughtheuseofacentralizeddatabasewithoutthedrawbackofmultipledependenciesamongsubsystems.
Independentclaims1,10and19ofCisco's'537patentrecite:1.
Amethodforreducingcomputationaloverheadinacentralizeddatabasesystembyexternallymanagingrouterdatainconjunctionwithacentralized9337-TA-944EnforcementComplaintdatabasesubsystem,saiddatabasesubsystemoperativelycoupledforcommunicationwithapluralityofroutersubsystemsoneofwhichisafirstmanagingsubsystem,comprising:a)transmittingamanagementregistrationrequestbysaidfirstmanagingsubsystemtosaiddatabasesubsystem,saidregistrationrequestindicatingrouterconfigurationdataforwhichsaidfirstmanagingsubsystemisrequestingtoprovideexternalmanagementservices,saidrouterconfigurationdatamanagedbysaiddatabasesystemandderivedfromconfigurationcommandssuppliedbyauserandexecutedbyarouterconfigurationsubsystembeforebeingstoredinsaiddatabase;b)receivingsaidmanagementregistrationrequestbysaiddatabasesubsystem;andc)registeringsaidfirstmanagingsubsystemforexternalmanagementbysaiddatabasesubsystem.
10.
Aprogramstoragedevicereadablebyamachine,tangiblyembodyingaprogramofinstructionsexecutablebythemachinetoperformamethodforreducingcomputationaloverheadinacentralizeddatabasesystembyexternallymanagingrouterdatainconjunctionwithacentralizeddatabasesubsystem,saiddatabasesubsystemoperativelycoupledforcommunicationwithapluralityofroutersubsystemsoneofwhichisafirstmanagingsubsystem,saidmethodcomprising:(a)transmittingamanagementregistrationrequestbysaidfirstmanagingsubsystemtosaiddatabasesubsystem,saidregistrationrequestindicatingrouterconfigurationdataforwhichsaidfirstmanagingsubsystemisrequestingtoprovideexternalmanagementservices,saidrouterconfigurationdatamanagedbysaiddatabasesystemandderivedfromconfigurationcommandssuppliedbyauserandexecutedbyarouterconfigurationsubsystembeforebeingstoredinsaiddatabase;(b)receivingsaidmanagementregistrationrequestbysaiddatabasesubsystem;and(c)registeringsaidfirstmanagingsubsystemforexternalmanagementbysaidmanagingsubsystem.
19.
Inarouterdevicehavingaprocessorandmemory,arouteroperatingsystemexecutingwithinsaidmemorycomprising:(a)adatabasesubsystem;(b)apluralityofclientsubsystems,eachoperativelycoupledforcommunicationtosaiddatabasesubsystem,oneofsaidclientsubsystems10337-TA-944EnforcementComplaintconfiguredasamanagingsubsystemtoexternallymanagerouterdatauponissuingamanagementrequesttosaiddatabasesubsystem;and(c)adatabaseoperativelycoupledtosaiddatabasesubsystem,saiddatabaseconfiguredtostorerouterconfigurationdataanddelegatemanagementofrouterconfigurationdatatoamanagementsubsystemthatrequeststomanagerouterconfigurationdata,saidrouterconfigurationdatamanagedbysaiddatabasesystemandderivedfromconfigurationcommandssuppliedbyauserandexecutedbyarouterconfigurationsubsystembeforebeingstoredinsaiddatabase.
('537patent(Ex.
14)atCol.
15:20-18:40.
)6.
2Asnotedabove,onJune23,2016,theCommissionissueditsopinionthatconfirmedAdministrativeLawJudgeShaw'sfindingthatAristaviolatedSection337byitsinfringementofclaims1-2,8-11and17-19ofthe'537patentandadditionalclaimsofmultipleadditionalCiscopatents.
(Ex.
7.
)TheCommissionissuedaLimitedExclusionOrderandCeaseandDesistOrderdirectedatArista'sproductsandcomponents.
(Exs.
11,19.
)ThePresidentialReviewPeriodendedwithoutanyinterventiononAugust22,2016,andtheCommission'sOrderswentintoeffectasofAugust23,2016.
(Exs.
11,19.
)6.
3TheCommission'sLimitedExclusionOrderstatesinrelevantpart:Networkdevices,relatedsoftwareandcomponentsthereofthatinfringeoneormoreof1,2,8-11,and17-19ofthe'537patent;claims6,7,20,and21ofthe'592patent;andclaims5,7,45,and46ofthe'145patentthataremanufacturedabroadbyoronbehalfof,orimportedbyoronbehalfof,Respondent,oritsaffiliatedcompanies,parents,subsidiaries,licensees,orotherrelatedbusinessentities,oritssuccessorsorassigns,areexcludedfromentryforconsumptionintotheUnitedStates,entryforconsumptionfromaforeigntradezone,orwithdrawalfromawarehouseforconsumption,fortheremainingtermsofthepatents,exceptunderlicenseofthepatentownerorasprovidedbylaw,andexceptforservice,repair,orreplacementarticlesimportedforuseinservicing,repairing,orreplacingnetworkdevicesunderwarrantyorservicecontracts,foridenticalarticles,thatexistedasofthedateofthisOrder.
(Ex.
19atSection1.
)6.
4TheCommission'sCeaseandDesistOrderprovidesinrelevantpart:11337-TA-944EnforcementComplaintThefollowingconductofRespondentintheUnitedStatesisprohibitedbythisOrder.
Fortheremainingtermoftherelevant'537patent,'592patentand'145patent,Respondentshallnot:(A)importorsellforimportationintotheUnitedStatescoveredproducts;(B)market,distribute,sell,orotherwisetransfer(exceptforexportation)importedcoveredproducts;(C)advertiseimportedcoveredproducts;(D)solicitU.
S.
agentsordistributorsforimportedcoveredproducts;or(E)aidorabetotherentitiesintheimportation,saleforimportation,saleafterimportation,transfer,ordistributionofcoveredproducts.
(Ex.
11atSectionIII.
)6.
5InopendisregardoftheCommission'sOrders,Aristacontinuesto,interalia,market,distribute,offerforsale,selling,advertise,and/oraidandabetotherentitiesinthesaleand/ordistributionof,afterAugust22,2016,importedproductsandcomponentsthatinfringethe'537patent.
1(AristaNetworkswebsiteadvertisementsforAristaswitches,capturedAug.
24,2016(Ex.
10).
)VII.
THEARISTAPRODUCTSATISSUE7.
1Arista'sinfringingproductsincludenetworkdevicesandrelatedsoftware,andtheircomponents("CoveredProducts").
ExemplaryCoveredProductsincludetheAristaswitches,includingatleastthe7010,7048,7050,7060,7150,7250,7260,7280,7300,7320,and7500seriesmodelsand/orAristaEOS,includingatleastversion4.
16.
6Mandlater.
TheseCoveredProductsareimportedormadewithimportedcomponentsintotheUnitedStatesandenablebusinesses,institutions,serviceproviders,andotherentitiesintheUnitedStates,indatacentersordedicatedcomputingcenterenvironmentstosupplynetworksandtransportdata,voice,andvideo.
Themarketing,distributing,offeringforsale,selling,advertising,and/oraidingorabettingotherentitiesinthesaleafterimportationand/ordistributionoftheCoveredProducts1DiscoverymaydemonstratethatArista'scontinuingmarketingandsaleofitsproductsalsoviolatestheLimitedExclusionOrderandCeaseandDesistOrderwithrespecttothe'592andT45patents;CiscoreservesitsrighttoamendthisComplainttoaddallegationsofinfringementrelatingtothosepatents.
12337-TA-944EnforcementComplaintaftertheeffectivedateoftheCeaseandDesistOrder(i.
e.
,afterAugust22,2016)violatestheCeaseandDesistOrderissuedtoArista.
VIII.
EVIDENCEOFVIOLATIONOFTHECEASEANDDESISTORDER8.
1AristahasviolatedtheITC'sCeaseandDesistOrderbymarketing,distribution,offeringforsale,selling,advertising,and/oraidingorabettingotherentitiesinthesaleand/ordistributionofCoveredProductsafterAugust22,2016.
8.
2Specifically,onJune27,2016,upontheissuanceoftheCommission'sOrders,Arista'sPresidentandChiefExecutiveOfficerJayshreeUllalissuedalettertocustomersstatingthatAristahadpurportedlydevelopedaredesignofitsoperating-systemsoftwarethatnolongerinfringedthe'537patent:WerecentlyreleasedanewversionofEOS(4.
16.
6M)thatwebelieveaddressestheITC'sinfringementfindingsinthiscase.
ThisnewversionofEOSisnowavailablefordownloadandwillbeshippedasthedefaultimageonallofnewproductsinthenearfuture.
(JayshreeUllalLettertoCustomers,datedJun.
27,2016(Ex.
20)at2.
)AsconfirmedbyCisco'stestinganddemonstratedherein,however,Arista'sallegedlyredesignednetworkdevicesstillinfringeclaims1-2,8-11and17-19ofthe'537patent.
8.
3OnJuly27,2016,afterAristapubliclyreleasedtoitscustomersitsredesignedversionofEOS,Cisco'scounselpurchasedintheUnitedStatesapubliclyavailablerepresentativeCoveredProduct,Arista's7050seriesnetworkdevice,ModelNo.
DCS-7050TX-48withEOSversion4.
16.
7M.
(ReceiptsofpurchaseofAristaProduct(Ex.
21).
)The"4.
16.
7M"versionofArista'sEOSoperatingsystemissubsequenttotheallegedlyredesigned4.
16.
6MversionandreflectsArista'sallegedeffortstodesignaroundthe'537patent.
Photographsoftherepresentative7050seriesareattachedtothisComplaintasExhibit22.
2DiscoverymaydemonstratethatAristahasimportedoraidedandabettedothersinimportingCoveredProducts.
13337-TA-944EnforcementComplaintCisco'sexperthasexaminedtherepresentativeDCS-7050TX-48withEOSversion4.
16.
7M,anddeterminedthat,aswiththepriorversions,itsatisfiesalltherequirementsofclaims1-2,8-11and17-19ofthe'537patent.
Claimchartsdemonstratinghowclaims1-2,8-11and17-19ofthe'537patentreadontherepresentativeDCS-7050TX-48withEOSversion4.
16.
7MareattachedasExhibit23.
Assuch,theclaimofaworkaroundisathinveiltocoverArista'songoinginfringementandconvinceitscustomers,manyofwhomhavestronglysupportedprotectionofintellectualpropertyrights,thattheyarebuyingaproductthatisnon-infringing.
8.
4Aristahasmarketed,distributed,offeredforsale,sold,advertised,and/oraidedorabettedotherentitiesinthesaleand/ordistributionforconsumptionintheUnitedStatesCoveredProductsthatwereimportedormadewithimportedcomponentssubsequenttoAugust22,2016,andintendstocontinuedoingso.
Forexample,Aristamarkets,offerstosell,sells,andadvertisestheCoveredProductsonitswebsite,www.
arista.
com.
(AristaNetworkswebsiteadvertisementsforAristaswitches,capturedAug.
24,2016(Ex.
10);seealsoJayshreeUllalBlog,TheStateofTelemetryinCloudNetworking,datedAug.
23,2016(Ex.
2)at2.
)AristaalsoaidsandabetsthirdpartyvendorsinthesaleanddistributionoftheCoveredProducts.
(ThirdPartywebsiteadvertisementsforAristaswitches,capturedAug.
24,2016(Ex.
24).
)Moreover,Aristapubliclystatedthatitintendstocontinuetomarket,distribute,offerforsale,sell,advertise,and/oraidorabetotherentitiesinthesaleand/ordistributionoftheCoveredProductsnotwithstandingtheCommission'sorders.
(Arista'sQ42015EarningConferenceCall,datedOct.
5,2015(Ex.
1)at6-7;seealsoArista'sChiefFinancialOfficer,OppenheimerTechnology,Internet&CommunicationsConferenceTranscript,datedAugust9,2016(Ex.
3)at2("[I]t'swithin[Arista's]righttocontinuetosell.
");NomuraMedia,TelecomandInternetConferenceTranscript(Ex.
5)at10("[Aristais]perfectlyentitledtoselltheproduct.
").
)14337-TA-944EnforcementComplaint8.
5Arista'sChiefFinancialOfficerconfirmedArista'sviolationsoftheCommission'sCeaseandDesistOrderbyusingaUnitedStatescontractmanufacturertomanufacturenetworkdevicesusingimportedcomponentscoveredbytheCommission'sordersandbybuildingupinventoryintheUnitedStatessoAristacould"buytime.
"(CowenTechnology,Media&TelecomConferenceTr.
,datedJun.
1,2016(Ex.
25)at13;PacificCrestGlobalTechnologyLeadershipForum,datedAug.
24,2016(Ex.
9)at2("[a]ndwe'vealsobuiltonourbuildings[s/c]someinventory,etc.
,intheUSsothatagainwehaveflexibility");Arista'sQ22016EarningsConferenceCall,datedAug.
4,2016(Ex.
26)at6("IthinkinQ3we'reprettymuchinanormal[sales]situationusingoffshoresupply.
IthinkaswemoveintoQ4.
.
.
wewillprobablystillbeleveraginganoversee[s/c]supplychain.
");Arista'sChiefFinancialOfficer,OppenheimerTechnology,Internet&CommunicationsConferenceTranscript,datedAugust9,2016(Ex.
3)at4("Aswesaid,mostofourQ3revenuewillcomefromproductsthatwereactuallymanufacturedattheothercontractmanufacturer.
.
.
[fjromabroad.
"),at4("SothatmeansbasicallythatwenowhavethecapabilitytomanufacturethoseproductsintheUS.
Thenextstepisramptovolume.
"),at5("Wehavetheinventorybuffers,andwe'llconsumethoseovertime").
)Moreover,numerousmarketresearchreportsdiscussArista'splantostockpileinventoryintheUnitedStatestocircumventtheCommission'sOrders.
(SeeNomuraReport,datedJun.
24,2016(Ex.
8)at1(stating"Aristawillsupplycustomers(withproductbasedontheworkaround)viaanimpending$50-$100mninventorybuild");JMPSecurities-InternetSecurity,Comm.
,datedJun.
24,2016(Ex.
27)at2(stating"managementhasindicatedthatthecompanywillbuildup$50-100MofinventoryinQ2");seealsoBarclaysEquityResearch,datedJun.
23,2016(Ex.
28)at1(discussingArista'sstockpiledinventoryintheUnitedStates);15337-TA-944EnforcementComplaintGoldmanSachsGlobalInvestmentResearch,datedJun.
20,2016(Ex.
29)at6(discussingArista'sUnitedStatesinventory).
)8.
6U.
S.
CustomsrecordsfurtherconfirmthatAristahasstockpiledinventoryofswitchesandcomponentsthroughimportationintotheUnitedStatesfromoverseas.
(See,e.
g.
.
CustomsDocumentation(Ex.
30)(includingfiveshipmentsinQ22016betweenHonHaiPrecision(Foxconn)toAristaNetworks,Inc.
,intheUnitedStatesincludingshipmentsof"electronicboard"and"computermainboard.
");AristaNetworks,Inc.
Form10-K,datedFeb.
25,2016(Ex.
31)at12.
)CiscoexpectsthatdiscoverywillrevealadditionalspecificactsbyAristathatviolatetheEimitedExclusionOrderandtheCeaseandDesistOrderwithrespecttotheCoveredProducts.
8.
7Cisco'srequestedreliefwillnotadverselyaffectthepublicinterest.
Thenetworkingmarketishighlycompetitiveandfast-moving,andhasundergoneperiodsofrapidgrowthandinnovation.
Aristaidentifiesatleastsevenothercompaniesasitsdirectcompetitors:Cisco,BrocadeCommunicationsSystems,Dell,Hewlett-Packard,JuniperNetworks,IBM,andVMWare.
(AristaNetworks,Inc.
Form10-K,datedFeb.
25,2016(Ex.
31)at36.
)8.
8Arista'spublicsecuritiesfilingsdemonstratethatitisawareoftheCeaseandDesistOrderandthepenaltiesitmayfaceiftheredesignisconfirmedtoinfringe:CiscomayalsoseektoenforcetheLimitedExclusionOrderand/orCeaseandDesistOrderissuedinthe944InvestigationbyfilingforanenforcementactionattheUSITC.
Thesamewouldbetrueifsuchordersareissuedinthe945Investigation.
Insuchaproceeding,wewouldneedtodemonstratethatourtechnicaldesign-aroundsrenderourproductsnon-infringingorotherwiseoutsidethescopeoftheLimitedExclusionOrderorCeaseandDesistOrder.
IfweareunabletodosothenanyproductshipmentsaftertheeffectivedateoftheLimitedExclusionOrderorCeaseandDesistOrder(whetherfromexistingimportedinventoryorfromproductsassembledfromforeignsourcedcomponents)couldbesubjecttosignificantcivilpenalties,potentialseizureofthatinventorywhichwasfoundtohaveanineffectivetechnicaldesign-around,16337-TA-944EnforcementComplaintandanorderprohibitingtheimportationoffurtherproductsuntilweimplementadditionaltechnicaldesign-arounds.
(AristaNetworks,Inc.
,Form10-Q,datedAug.
4,2016(Ex.
6)at16.
)AristahasbeengivenactualnoticeofitsviolationoftheCeaseandDesistOrder,anditscontinuedinfringementofthe'537Patent,byCisco'sserviceofthisComplaintonAristaatthetimeoffilingwiththeCommission.
IX.
APPROPRIATERELIEF9.
1WHEREFORE,byreasonoftheforegoing,CiscorespectfullyrequeststhattheUnitedStatesInternationalTradeCommission:(a)Instituteaformalenforcementproceeding,pursuantto19C.
F.
R.
§210.
75,toconfirmtheviolationoftheCeaseandDesistOrder,includingasdescribedherein;(b)ExpeditetheproceedingandpromptlyreferthismattertoanAdministrativeLawJudgeforissuanceofanInitialandFinalDeterminationontheissuesoftheenforcementviolationandremedyrequested;(c)DirecttheAdministrativeLawJudgeto:(1)PermitanecessaryandexpeditedperiodforfactdiscoveryonArista'scontinuedviolationsCeaseandDesistOrder;(2)Holdahearing;and(3)IssueaFinalDeterminationonEnforcementassoonaspracticable;and(d)Aftertheenforcementproceeding,intheeventtheCommissiondeterminesthattherehasbeenaviolationoftheCommission'sCeaseandDesistOrder,providethefollowingremedies:17337-TA-944EnforcementComplaint(1)EnforcetheCeaseandDesistOrderpursuantto19U.
S.
C.
§1337(f)and19C.
F.
R.
§210.
75,prohibitingAristaNetworks,Inc.
andtoanyofitsprincipals,stockholders,officers,directors,employees,agents,licensees,distributors,controlled(whetherbystockownershiporotherwise)andmajority-ownedbusinessentities,successors,andassigns,andtoeachofthem,fromengaginginillegalactivities;(2)ModifytheCommission'sLimitedExclusionOrderand/orCeaseandDesistOrderpursuantto19C.
F.
R.
210.
75(b)(4)inanymannerthatwouldassistinthepreventionoftheunfairpracticesthatwereoriginallythebasisforissuingsuchOrderorassistinthedetectionofviolationsofsuchOrder;(3)ImposethemaximumstatutorycivilpenaltiesforviolationoftheCommission'sCeaseandDesistOrder(includingmonetarysanctionsforeachday'sviolationoftheCeaseandDesistOrderofthegreaterof$100,000.
00ortwicethedomesticvalueofthearticlesenteredorsold,whicheverishigher)againstAristaandanyofitsprincipals,stockholders,officers,directors,employees,agents,licensees,distributors,controlled(whetherbystockownershiporotherwise)andmajority-ownedbusinessentities,successorsandassignsfoundtobeinviolationoftheCeaseandDesistOrder;(4)BringacivilactioninanappropriateUnitedStatesDistrictCourtpursuantto19C.
F.
R.
§210.
75(c)and19U.
S.
C.
§1337(f)requestingcollectionof18337-TA-944EnforcementComplaintsuchcivilpenaltiesandtheissuanceofamandatoryinjunctionpreventingfurtherviolationofCeaseandDesistOrder;and(5)ImposesuchotherremediesandsanctionsasareappropriateandwithintheCommission'sauthority.
19337-TA-944EnforcementComplaintDated:August26,2016/I/'/>fI//Respt^fuflysubmitted,StevenChernyKIRKLAND&ELLISLLP601LexingtonAvenueNewYork,NewYork10022Telephone:(212)446-4800Facsimile:(212)446-4900AdamR.
AlperSarahE.
PiepmeierAkshayS.
DeorasKIRKLAND&ELLISLLP555CaliforniaStreetSanFrancisco,California94104Telephone:(415)439-1400Facsimile:(415)439-1500MichaelW.
DeVriesKIRKLAND&ELLISLLP333SouthHopeStreetLosAngeles,California90071Telephone:(213)680-8400Facsimile:(213)680-8500D.
SeanTrainorKIRKLAND&ELLISLLP65515thStreet.
N.
W.
Washington,DC20005Telephone:(202)879-5000Facsimile:(202)879-5200DeannaT.
OkunPaulM.
BartkowskiAdduci,Mastriani&Schaumberg,LLP1133ConnecticutAvenue,NW,12thFloorWashington,D.
C.
20036Telephone:(202)467-6300Facsimile:(202)466-2006CounselforComplainantCiscoSystems,Inc.
20VERIFICATIONOFCOMPLAINTI,CollinSacks,declare,inaccordancewith19C.
F.
R.
§§210.
4(c)and210.
12(a),underpenaltyofperjury,thatthefollowingstatementsaretrue:1.
lamcurrentlyanOperationsManagerinCiscoSystems,Inc.
'sLegalDepartment.
IamdulyauthorizedbyComplainantCiscoSystems,Inc.
toverifytheforegoingComplaint.
2.
TheComplaintisnotbeingfiledforanyimproperpurpose,suchastoharassortocauseunnecessarydelayorneedlessincreaseinthecostoflitigation.
3.
Tothebestofmyknowledge,information,andbelief,formedafterareasonableinquiry,theclaimsandotherlegalcontentionssetforthintheComplaintarewarrantedbyexistinglaworbyagoodfaith,non-frivolousargumentforextension,modification,orreversalofexistinglaw,orbytheestablishmentofnewlaw.
4.
Tothebestofmyknowledge,information,andbelief,formedafterareasonableinquiry,theallegationsoftheComplaintarewellgroundedinfactandhaveevidentiarysupport,or,wherespecificallyidentified,arelikelytohaveevidentiarysupportafterareasonableopportunityforfurtherinvestigationordiscovery.
ExecutedonA^t_lZTT2016CollinSacks