The company is seeking an injunction to halt sales of ISS's flagship product, RealSecure, which probes networks to identify security holes that might be exploited by attackers.
Network Associates acquired the security patent earlier this year when it bought Trusted Information Systems, which earlier had purchased Haystack Labs, an intrusion detection software firm that had won the original patent. The legal action seeks monetary damages and treble damages for willful infringement.
But the battle over the lawsuit, filed in federal court in the Northern District of California, quickly disintegrated into a war of words over what Network Associates CEO William Larson did or did not say last week.
"We were aware of the potential lawsuit as a result of public statements made by William Larson, CEO of Network Associates," ISS stated in a press release. "Larson stated that he intended to sue Internet Security Systems allegedly for patent infringement for the purpose of affecting our sales cycle and the momentum of our company."
"Bill did not say that," countered Art Wong, Network Associates' director of intrusion protection. "He didn't talk about this possible or impending lawsuit. He didn't say it; it's completely untrue."
"We think it is inappropriate to use the patent court to slow down companies that are trying to concentrate on markets and customers," countered ISS chief executive Tom Noonan, adding that his firm has been familiar with the patent for several years. "People tell me it's very consistent with tactics he's used to compete before."
"It's about intellectual property--we own it, and we owe it to our shareholders to protect it," retorted Wong. "We have a patent on the process, and ISS is violating it."
Wong, who came to Network Associates two months ago when it acquired his intrusion protection firm Secure Networks, said he is not aware of other vendors that might be infringing on the Haystack patent, U.S. patent No. 5,557,742 "relating to a method and system for detecting intrusion into and misuse of a data processing system." He said ISS may have inadvertently violated the patent.
Meanwhile, ISS believes Larson's purported statements may be legally "actionable," meaning they could serve as grounds for a countersuit.
"It is not our policy to use the press to launch lawsuits," ISS's Noonan added. "If this gets more inappropriate, we certainly feel we have the ability and options to take further action here. It's not something that we have announced at this time."
Yesterday, Network Associates said it would make a copy of its CyberCop Scanner tool available free to resellers--a move it said was designed to undercut RealSecure, ISS's product.
"Customers are buying best-of-breed; they are very concerned about this area. I saw it as kind of a desperate tactic," Noonan declared, noting that numerous hacker tools are available free on the Internet.
Network Associates has been on a buying binge since late 1997 as it moves beyond its core antivirus market into network security and management. The company has a litigious history. It remains embroiled in a nasty legal fight with antivirus rival Symantec.
The intrusion detection market has been hot, with acquisitions, new products, and start-ups targeting network managers who want to ward off attackers. For example, Cisco Systems in February acquired WheelGroup, another intrusion detection firm.
ISS itself went public in March, and yesterday a Yankee Group report on the "adaptive network security management" market named ISS as the market share leader, with 30 percent of the $45 million market last year.
Yankee's Matthew Kovar said the market covers both probing tools to identify weaknesses and intervention tools to halt attacks in progress.
He thinks the market will boom to $160 million this year and $315 million in 1999. After ISS's 30 percent market share, Kovar lists Axent Technologies at 19 percent, Network Associates and Cisco at 11 percent each, and Security Dynamics at 10 percent.