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Suit accuses HP of stealing secrets

Hewlett-Packard faces a $100 million lawsuit accusing it of stealing trade secrets.

A modern-day David has taken aim at Hewlett-Packard with a $100 million lawsuit accusing the computer giant of false ownership and misappropriation of trade secrets.

The suit was filed yesterday in U.S. District Court by New Century Communications, a division of Allentown, Pennsylvania-based Computer Aid. It alleges that when HP acquired cable TV testing-equipment manufacturer CaLAN in June of 1994, it wrongfully claimed technologies developed under a joint-venture agreement between Computer Aid and CaLAN.

Computer Aid alleges that HP CaLAN sold itself to HP on the basis of a network management and diagnostic software program called Galaxy, which New Century had been developing under an exclusive joint agreement with CaLAN. Several months after the acquisition, the suit charges, HP asserted that it was the sole owner of all software rights associated with Galaxy and ordered New Century to stop working on the program.

"There's a bunch of products HP has that have Galaxy-type technology that they didn't have before they acquired CaLAN," says Jay Spievack, a partner in Anderson, Kill, Olick, & Oshinsky, the law firm representing Computer Aid. Chief among these, Spievack says, are HP's Broadband Launch Pad and Broadband System Analyzer, both of which he contends perform functions identical to those associated with Galaxy.

A Hewlett-Packard spokeswoman said that HP acquired CaLAN for its cable television technology and that Computer Aid's complaint includes devices not associated with cable TV. HP officials are reserving further comment until the company has been served with the suit.

But Spievack claims that HP adapted the Galaxy technology to other uses. "The device was robust enough to monitor any transmission of high-speed data," he said.