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Avant ordered to pay $182 million

The chip-design software maker must pay rival Cadence Design Systems $182 million in restitution for stealing its trade secrets, a judge rules.

Chip-design software maker Avant must pay rival Cadence Design Systems $182 million in restitution for stealing its trade secrets, a Santa Clara County, Calif., judge has ruled.

In May, just before a lengthy trial was set to begin, Avant and some of its executives and employees pleaded no contest to criminal charges of trade secret theft. They were accused of taking code from Cadence and incorporating it into Avant products.

Cadence had asked for $700 million. After a restitution hearing that lasted several weeks, the judge ordered Avant to pay $182 million plus retroactive interest for lost profits and attorney fees, an amount Cadence executives said would add up to at least $200 million--more than twice Avant's annual earnings in 2000.

Cadence has not yet accounted for the money in any of its financial statements, and Avant still may appeal the ruling. Meanwhile, Cadence General Counsel R. L. Smith McKeithen said the judge's ruling "underscores the magnitude of the crimes committed."

"Those who steal trade secrets will pay the consequences," he said.

Avant would not immediately comment on the ruling.

Several current and former Avant workers also are facing jail time, and some must pay fines.

Most trade secrets cases are heard in civil court. But the district attorney decided to bring criminal charges against Avant because, he said, the company's actions were so egregious.

Cadence said it would aggressively pursue its civil suit, which was put on hold pending the outcome of the criminal case. The company plans to seek fines of "hundreds of millions" of dollars and a preliminary injunction that would prevent Avant from shipping several products. Cadence also said the civil case would address more products over a longer period of time than the criminal case.

The civil suit isn't expected to go to trial until next year and could take several months.

The criminal charges were first filed in 1997, after a three-year investigation. Avant succeeded in delaying the case for years. During pretrial motions, the company argued that it hasn't sold products containing the disputed code for years, making the case outdated.