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Rivalries taken to court

After years of feuding, some technology companies seem more ready than ever to tell it to the judge.

3 min read
After years of feuding, some technology companies seem more ready than ever to tell it to the judge.

The most recent example is Symantec (SYMC), which yesterday filed a copyright infringement case in a San Jose, California federal court against long-time rival McAfee (MCAF).

The lawsuit charges that McAfee's PC Medic program includes a critical section of code that is identical to Symantec's CrashGuard product. Both programs are used to restore PC data in the event of a crash.

But the McAfee vs. Symantec case is only the third of three such cases filed this year.

Earlier this month, Santa Clara County District Attorney's office filed criminal charges against Avant (AVNT) over allegations the software maker stole trade secrets from competitor Cadence Design (CDN).

And in January, database software maker Informix (IFMX) pursued but failed to secure a temporary restraining order against rival Oracle (ORCL) after 11 engineers jumped ship to Oracle. The court did not make the employees go back to Informix but did order them not to divulge any trade secrets.

While all three of these cases have their origins in long-term feuds between the parties, they may indicate a new willingness to litigate in Silicon Valley spurred by an increased awareness of the value of intellectual property.

"There may be some amount of uptick in these type of cases," said attorney David Slaby with Fendwick & West in Palo Alto, which represents Symantec in its lawsuit. "It may not be from more theft occurring, but rather, more companies are aggressively protecting their intellectual property."

Slaby thinks more companies are taking the litigation route because legal action is seen as more acceptable these days in the industry.

Smith McKeithen, general counsel at Cadence, thinks the increase in suits reflects the increase in the number of new technology enterprises and the increased competition of the limited talent pool of engineers.

It's long been common for programmers and engineers to traipse between direct competitors, but companies are increasingly vigilant about guarding the trade secrets they take with them.

"It's a lot like baseball. You have a whole lot of free agents that have waited for their contract to expire," said Michael Page, an attorney with Keker & Van Nest in San Francisco and outside counsel to Cadence. "In [Silicon] Valley, you have people waiting for their shares to vest and then they jump ship."

While all of the parties involved in these suits have been competing for years, the decision to ask the courts to intercede may also reflect a new intensity to that competition.

The lawsuit alleges that McAfee "knowingly stole" the patent-pending code from its competitor in the cutthroat market for software utilities programs. Symantec has asked the court to order a recall of the McAfee product and enjoin the company from shipping additional copies of the software. It also seeks damages that include all of McAfee's profits from PC Medic sales.

This year's cases, however, are by no means the first. The most famous technology copyright infringement suit was filed by Apple Computer against Microsoft in the '80s to protect its distinctive "desktop" interface, a case that generated an enormous amount of publicity but left Microsoft's Windows operating system largely untouched in the end.

Lotus Development and Borland International also fought for six years over similar features in their competing spreadsheets in a case that Borland ultimately won early in 1996.

But historically, computer companies have been relatively reluctant to sue each other, both because of a professional culture among engineers that considers litigation bad form and the difficulty of arguing technology cases before judges who know nothing of source code.

Joseph Yang, an intellectual property attorney with McCutchen Doyle Brown & Enersen noted that in recent years the courts have begun to recognize that software is "clearly" a product that can also receive a patent.

He added that in 1982 the judicial system created a court to hear patent infringement cases, which has made the laws and outcome of cases more predictable.

"There is now consistency to the law," he said.