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Judge stays Cadence suit vs. Avant

Electronic design automation software maker Avant says a federal judge has granted its motion for a stay in a trade secret civil lawsuit brought by competitor Cadence Design Systems.

Avant (AVNT) today announced that a federal judge has granted its motion for a stay in a trade secret civil lawsuit brought against it and two of its employees by competing electronic design automation software maker Cadence Design Systems (CDN).

This stay puts the civil trial on hold until the criminal case involving allegations of intellectual property theft is settled. Courts typically grant a stay when there are parallel criminal and civil proceedings.

A source close to the lawsuit said shareholder suits pending against the company were also granted a stay.

Cadence said the decision on the stay was not a surprise. "This paves the way for criminal case, but they are just delaying the inevitable," said Mike Sottak, a Cadence spokesman.

Avant said the stay will enable the company to continue focusing on business, said Matt Lifschultz, a spokesman. "We will still vigorously defend ourselves in the criminal trial, but our focus is on business not the criminal trial. The focus is on developing technology, serving our customers, and prevailing in the marketplace."

While Avant is delaying the civil suit, it will not be able to avoid the criminal charges. "They're trying to jump out of the frying pan, but the only place they can go is right into the fire,'' said Joe Costello, president and CEO of Cadence, in a statement earlier this month.

"For a company which is supposedly in such a hurry to get the legal battles against Cadence over with, Avant is certainly seeking at every turn to postpone the inevitable. If they were sincere in their desire to see the truth come out they would not seek to delay the civil proceedings," Costello said.

But the relief for Avant is that it no longer has to expend the resources on the civil case for now, said one source, noting that it is difficult to be involved in two cases covering the same information at the same time. Now there will be no discrepancy between what is discussed at one case and what is discussed the other, he said.

The source said that another favorable decision was granted last week to Avant: A judge ruled to have files and records that were apprehended in a 1995 police raid returned.

In June, shareholders filed a class-action suit against Avant, and felony charges were filed against Avant executives in April for allegedly stealing proprietary software technology from their former employer, Cadence. The shareholder suit also alleges the company made misleading statements and failed to disclose information about defendants' wrongful use of the technology allegedly stolen from Cadence.

In April, Cadence charged that its competitor and its executives conspired and stole trade secrets from Cadence.