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RSA sues Network Associates

The encryption company is seeking to bar its rival from shipping any Trusted Information Systems software that uses RSA technology.

RSA Data Security is seeking to bar Network Associates from shipping any Trusted Information Systems software that uses RSA encryption technology.

Earlier this year, Network Associates acquired TIS, licensed by RSA to use its encryption algorithms in TIS virtual private network software. RSA is a wholly owned subsidiary of Security Dynamics.

The latest copyright infringement suit, filed May 13 in U.S. District Court in San Francisco, is the second between RSA and Network Associates. Network Associates acquired longtime RSA rival Pretty Good Privacy last year and inherited the long-running PGP-RSA litigation.

RSA's latest suit appears to be in part a tactic in settlement talks over the PGP suit, which resume May 28. A separate arbitration hearing is scheduled for October. RSA and Network Associates have been negotiating a settlement of the PGP case for months, with the price tag still a stumbling block.

"RSA is a company based on intellectual property," said Paul Livesay, RSA's general counsel. "Right now we perceive Network Associates as having an approach to doing business by acquiring companies and ignoring third-party agreements, so why would we want to assign the license to TIS to a party that operates in that manner?"

Livesay said the agreement with TIS included specific language to cover assigning the license in the event of an acquisition.

"RSA was not in a position to assign [the TIS license] to Network Associates, given the other infringement," he added, acknowledging that the latest suit would be a discussion point in any settlement talks around the PGP litigation.

"We are confident that we will be able to ship all our products," said Peter Watkins, general manager for Network Associates' security products, saying the suit only addresses its virtual private network (VPN) software. "We will continue discussions and settlement discussions with RSA on other matters. We expect to reach resolution."

Watkins said his firm will track sales of the VPN software that uses RSA technology to pay accrued royalties once the dispute is settled. Network Associates has requested a new licensing contract with RSA for that product.

The lawsuit may kill the already-shaky Secure One interoperability alliance involving RSA, Security Dynamics, VeriSign, and McAfee Associates, which merged last year with Network General to form Network Associates.

Network Associates said in January that SecureOne remained in its plans. But the company, still McAfee at the time, never dropped its desktop encryption product as it had said it would when the alliance was formed. In fact, it now sells PGP's desktop encryption software.

On June 18, Judge William Orrick is slated to hear RSA's request for a preliminary injunction to stop Network Associates from shipping certain TIS software.