The ITC recently modified a previously issued remedial order such that certain of the Respondents' redesigned products were not covered by the limited exclusion order (LEO) or the cease and desist order (CDO). Certain Network Devices, Related Software and Components Thereof (II), Commission Order, Inv. No. 337-TA-945 (June 26, 2018).
The underlying investigation between the Complainant, Cisco Systems, Inc. (Cisco) and Respondent, Arista Networks, Inc. (Arista) concluded in May 2017 when the ITC found that Arista, infringed two of Cisco's patents – U.S. Patent Nos. 6,377,577 ("the '577 patent") and 7,224,668 ("the '668 patent"). The ITC subsequently issued an LEO and a CDO against Arista.
In parallel proceedings, Arista challenged the validity of Cisco's asserted patents in IPR proceedings at the PTAB. The PTAB issued a decision in May 2017 finding the '577 patent claims unpatentable and another decision in June 2017 finding the '668 patent claims unpatentable. With these decisions from the USPTO, Arista asked the ITC to suspend or rescind the remedial orders issued in the underlying investigation. On July 25, 2017, the ITC denied that petition, explaining that "the PTAB final written decisions do not constitute changed conditions of fact or law that warrant temporary rescission of the remedial orders pending appeal of the PTAB decisions."
Next, in August 2017, Arista released redesigned products which they claimed did not infringe the asserted patents. In September 2017, Cisco requested the ITC to conduct a modification proceeding to determine whether Arista's redesigned products infringed the asserted patents and should be covered by the LEO and the CDO. The ITC instituted modification proceedings and on March 23, 2018, ALJ MacNamara determined that Arista's redesigned products did not infringe the '577 patent, but still infringed the '668 patent and recommended modification of the LEO and the CDO to include Arista's redesigned switches that infringe the '668 patent.
The LEO and CDO were further modified to suspend enforcement of those orders with respect to the '668 patent only after the Federal Circuit affirmed the PTAB's decision related to the '668 patent in February 2018.
Parties at the ITC should pay particular attention to the usefulness of redesigned products at the ITC. Respondents should look to incorporating a redesigned product into their case strategy early and Complainants should consider how to address any such redesigns, including how to effectively utilize modification and enforcement proceedings. As this case demonstrates, the ITC gives little deference to PTAB proceeding unless all appeals have been exhausted.
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