Injunction on Cadence competitor

A federal judge orders Avant to revoke all licenses for use of its ArcCell products but is not ready to issue a similar injunction on the company's flagship product.

2 min read
Cadence Design Systems (CDN) said today that a federal judge has placed a preliminary injunction on an older product made by Avant (AVNT), but is not yet ready to issue a similar injunction on the company's flagship product, known as Aquarius.

U.S. District Court Judge Ronald Whyte's order forbids Avant from making or marketing a product known as ArcCell, and also from using any software that contains code copied or derived from Cadence software, said Smith McKeithen, Cadence's vice president and general counsel. At today's hearing in San Jose, California, Whyte made it clear that his injunction could apply to Aquarius, or a successor product, if he finds that it also violates Cadence's copyrights, McKeithen said.

Avant stock closed up today at 17-15/16, a 16 percent gain. Cadence was up 3 percent at 24-1/2.

McKeithen said that Judge Whyte's decision is a victory for Cadence, which claimed in a 1995 lawsuit that some of its "place-and-router" software is contained in past and present versions of products made by its archrival Avant.

"I'm really encouraged by [the decision]," said McKeithen. "Every time we have gotten a neutral viewer of facts to look at the facts, it has taken an action that vindicates our position."

But an Avant spokesman said the injunction would have no effect on the Fremont-based company, because it is enjoined from selling a product that is no longer on the market. "We regard the injunction as being insignificant in that we don't expect it to disturb any of our customers or our business operations," said spokesman Matt Lifschultz. "We are confident that the [Aquarius and successor] products do not contain copyright-infringing code, and we're looking forward to the day when the judge makes that determination."

Whyte also dismissed an Avant countersuit for malicious prosecution, but gave the company the option of filing an amended complaint.

The two companies have been locked in a bitter dispute over intellectual property. In 1994, Cadence complained to the Santa Clara County district attorney's office in Silicon Valley that outgoing company executives took trade secrets when they defected to Avant. Last April the district attorney investigating the case filed felony trade-secret misappropriation charges against seven people, including six former Avant executives.

In a separate ruling last March, Whyte ruled that, under a separate analysis based on trade-secret law, efforts to remove cadence code from Avant's software were probably inadequate.

Whyte gave Avant until January 15 to turn over source code for both products so that Cadence experts can determine if it violates copyrights on a Cadence product known as Design Framework II.

Avant and Cadence develop software that allows electrical engineers to create and test semiconductor designs. The software also is used to automate.