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Speaker 1: Global business news twenty four hours a day at Bloomberg

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Speaker 1: This is a Bloomberg Business Flash from Bloomberg World Headquarters.

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Speaker 1: I'm Charlie Pellett. We are brought to you by Instinct

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Speaker 1: right over to the First Word Breaking news desk for

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Speaker 1: today's afternoon call. And here's ed Laalan. Good afternoon, Charlie,

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Speaker 1: man U. S Averages are hired today, with the Dow

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Speaker 1: up by thirty two points, SUP games six and NASDAC

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Speaker 1: rises nineteen, small cap six hundred games six and the

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Speaker 1: US tenure yield at one point five cent. Eight out

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Speaker 1: of ten SMP sectors are higher, led by gains in materials, energy,

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Speaker 1: and consumer discretionary sectors, leading to the downside our utilities

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Speaker 1: and consumer staples down. Transports rise thirty six, NASDAC, Biotechs

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Speaker 1: are up, for utilities lose one, and the VIX is

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Speaker 1: little changed. Leaders to the upside of the Dow include Nike,

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Speaker 1: DuPont and Cisco, while Dow leaders to the downside include Boeing, Exxon,

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Speaker 1: and Walmart. Best Buy gains eighteen percent today after beating estimates,

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Speaker 1: and it was a big day for the home builders.

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Speaker 1: New home sales beat estimates and Told Brothers reported earnings.

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Speaker 1: Toll gains eight percent and Lennar up three percent after

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Speaker 1: the Bell Tonight, look from Earning, Look for earnings from

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Speaker 1: into It and die Com Industries. Live from the First

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Speaker 1: Word Breaking News desk. I'm at the lawn, Charlie. All right,

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Speaker 1: thank you very much, Jad and to hear live breaking

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Speaker 1: news over your Bloomberg type squawk squ a w K

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Speaker 1: on your terminal. I'm Charlie Pelton. That's sub Bloomberg Business Flash.

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Speaker 1: You're listening to taking Stock with pim Box on Bloomberg Radio.

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Speaker 1: It's a battle between Arista Networks and Cisco. To tell

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Speaker 1: us more, we've got Matt Larson. He is litigation analyst

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Speaker 1: for Bloomberg Intelligence. He joins us from our Bloomberg studio

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Speaker 1: in Washington, d C. He can be followed on Twitter

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Speaker 1: at Matt P. Larson. Matt, great to have you with us.

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Speaker 1: Tell us about this copyright patent lawsuit battle Arista networks

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Speaker 1: versus Cisco has to do with something that people wear

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Speaker 1: on their wrists, the fitbit. Yeah, sure, they're actually their

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Speaker 1: two lawsuits. The Arista Cisco battle is looking at network switches,

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Speaker 1: which are essentially routers for large data centers UM. Arista's

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Speaker 1: has been gobbling up Cisco's market share and they filed

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Speaker 1: suit maybe a couple of years ago. Uh, just a

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Speaker 1: slew of lawsuits in the International Trade Commission and district court. UM.

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Speaker 1: We're kind of coming to the end of the battle.

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Speaker 1: Cisco was threatening an import band they won the International

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Speaker 1: Trade Commission K and it looked like Arista's products were

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Speaker 1: going to be blocked from US sales UM when Arista

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Speaker 1: was able to move manufacturing to the US to store

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Speaker 1: ups and US inventories UM. And what what we're seeing

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Speaker 1: in this case is Cisco is going to initiate kind

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Speaker 1: of the next phase of litigation. Arista seems to have

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Speaker 1: avoided a lot of UM, a lot of the potential

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Speaker 1: bands UM, much to Cisco's chagrin, and so Cisco is

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Speaker 1: preparing to now file a new suit. It looks like

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Speaker 1: in order to actually get products blocked from the U

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Speaker 1: s or it seeks some kind of monetary sanctions, and

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Speaker 1: so it's it's been a battle over over share in

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Speaker 1: the network switch market. Um and really just kind of

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Speaker 1: difficulty for Cisco to enforce its intellectual property against Arista. Now,

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Speaker 1: Arista if it goes to make the products and procuring

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Speaker 1: the components, if they make this in the United States,

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Speaker 1: then they can sell it to US customers and they

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Speaker 1: account for about sevent sales. That's right. One of the

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Speaker 1: you know, the lawsuit was filed in the International Trade Commission,

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Speaker 1: and the only remedy that the i t C offers

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Speaker 1: are our product bands. They don't typically give money damages

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Speaker 1: except in sanctions and for some isolated incidents. Uh. And

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Speaker 1: there was a big problem for Ariska. They were manufacturing

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Speaker 1: products abroad and importing them into the US. UH. So

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Speaker 1: you know what they did to to avoid the threat

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Speaker 1: of this import band as they moved everything to tow

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Speaker 1: or you know a large portion of their manufacturing to

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Speaker 1: the US, so there's not an import issue. Um. And

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Speaker 1: so they've got kind of stores and are able to

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Speaker 1: make US sales for the short term, so sales really

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Speaker 1: haven't been impacted. UM. They're projected to do one point

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Speaker 1: one billion in revenue in twenty sixteen. Um. But in

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Speaker 1: the meantime, you know, Cisco is kind of scratching its

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Speaker 1: head saying, we have these orders. We won this patent case. Uh,

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Speaker 1: there should be some remedy. Um, so they're going to

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Speaker 1: kind of go back and try to get either stricter

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Speaker 1: orders that um that kind of put higher burdens for

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Speaker 1: US sales on Arista. Uh you know, next next eight

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Speaker 1: months to twelve months, or they're gonna start seeking monetary sanctions.

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Speaker 1: There are also some other trials in this battle between

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Speaker 1: Cisco and Arista. There's a copyright dispute that's going to

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Speaker 1: trial in November where we could see some potential money

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Speaker 1: damages if things go Cisco's away. Uh. There's another I

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Speaker 1: t C case where there's a decision coming out at

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Speaker 1: the end of this week. So there's gonna be a

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Speaker 1: lot of activity in this brewing battle between Cisco and Arista.

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Speaker 1: All right. Now, the lawyers are also being kept busy

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Speaker 1: by a case involving Jawbone and Fitbit. Tell us about this, Yeah,

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Speaker 1: that's right. So this is the the activity tracker battle. Um.

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Speaker 1: As you know, as everybody's familiar with their activity trackers

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Speaker 1: are all the rage people have them on their wrists.

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Speaker 1: You've got your step counters. UM. A couple of years ago,

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Speaker 1: Jawbone filed suit against Fitbit, alleging that Fitbit, after hiring

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Speaker 1: some job and employees, had misappropriated trade secrets related to

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Speaker 1: both business activities and the actual technology that went into

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Speaker 1: uh these fitness trackers. UM. And so again they've they've

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Speaker 1: filed suit in the International Trade Commission seeking to have

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Speaker 1: some of fitbits products blocked from the US markets. UM.

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Speaker 1: It started out as a patent and trade secrets case.

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Speaker 1: A lot of the patents got knocked out, only the

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Speaker 1: trade secrets portion is remaining. Uh. They went to trial

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Speaker 1: a couple of months ago, and we're waiting on the

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Speaker 1: final decision in that case. It should come out this afternoon. UM.

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Speaker 1: And what's effectively going to happen is the judge who

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Speaker 1: heard the case is going to make an initial ruling

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Speaker 1: either in fitbits favor saying you know, no harm, no foul,

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Speaker 1: there was no misappropriation of trade secrets, or she's gonna

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Speaker 1: rule in job Bones favor and say, look, Fitbit has

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Speaker 1: incorporated some of these ill gotten trade secrets into their

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Speaker 1: products and may recommend a US product band. That worst

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Speaker 1: case scenario would be implemented in February, which gives Fitbits

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Speaker 1: some time to potentially design around to UH to remedy

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Speaker 1: any perceived wrongdoing or anything like that. And job Bon

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Speaker 1: is currently privately held, while Fitbit, a publicly traded company

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Speaker 1: trading under the symbol f I T shares a Fitbit

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Speaker 1: down nearly fifty percent so far this year, shares trading

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Speaker 1: higher today by fifty three cents at fourteen dollars and

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Speaker 1: nineties seven cents my thanks to Matt Larson. He is

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Speaker 1: litigation analyst for Bloomberg Intelligence. Of course, Bloomberg Intelligence provides

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Speaker 1: real time research and context for a variety of industries.

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Speaker 1: Terminal customers can access this function at b I go

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Speaker 1: on the Bloomberg this is taking stock. I'm pim Fox

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