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Novell wins trade secret ruling

The networking software supplier wins an initial legal victory over a start-up that consists largely of former company employees.

Networking software supplier Novell (NOVL) won an initial legal victory over a start-up company made up largely of former company employees.

A preliminary injunction filed Friday by Judge Anthony W. Schofield in the 4th Judical District Court of Utah County in Provo, Utah, restrains former employees of Novell now employed by the Timpanogas Research Group (TRG) from developing software based on clustering, file management, directories, clustering interconnects, storage, and routing systems for nine months.

The initial Novell suit against employees of TRG, filed last spring, alleges that the ex-employees--among them Jeff Merkey and Darren Major--breached their Novell employment contract and fiduciary duties as employees, misappropriated trade secrets, and infringed on the project's trademark.

"We're pleased with the results thus far," a Novell spokeswoman said.

The former employees were key members of the "Wolf Mountain" development team at Novell until their abrupt departure last spring after an initial rollout of their work at the company's user conference.

Wolf Mountain is the code name for a series of technologies based around clustering capabilities, which allow multiple systems to be strung together to act as a single computer, as well as high-performance file system software.

TRG's initial clustering software products were being written for Novell's chief competitor, Microsoft's Windows NT. Novell plans to introduce a clustering software product based on Wolf Mountain, now dubbed Orion, in the second half of this year.

Merkey was a chief architect of Novell's Wolf Mountain Project, and Major served as a senior research scientist. Merkey, the chief executive of TRG, posted a response to the judge's ruling on the company's Web site.

"The reader is left to ponder how such a thing is possible in the United States of America, where a competitive free society encourages workplace mobility," the statement reads. The nine-month halt to TRG software development is called "intellectual slavery."

"What was most remarkable about this case was the court's ruling. The court ruled that TRG's ideas and work experience were Novell's trade secrets, and that by using work experience and problem solving gained through this experience, TRG was using Novell's trade secrets, even though those ideas were either in the public domain or being used by other companies in the industry," the statement added.

"This ruling sets a dangerous precedent in the high-technology community," it says. "While it is clearly a win for big business, and in the long run will benefit large corporations engaged in high tech, it discourages high-tech professionals and scientists from viewing Utah as a viable area to pursue career interests."

The statement also says TRG will comply with the injunction until it is overturned or expires.