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Brocade Awarded $60M From Startup A10

Craig Matsumoto
News Analysis
Craig Matsumoto
1/11/2013
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A federal court has confirmed $60 million of the $112 million in damages that Brocade Communications Systems Inc. was awarded against A10 Networks Inc. in August. The court also entered an order on Thursday to block sales in the United States of the AX series of application delivery controllers that infringe on Brocade's claims. But it doesn't apply to any AX equipment already sold. Moreover, A10 has previously said it did away with the offending code -- 145 lines that A10 says represent a publicly available algorithm -- in 2011. The company says equipment with the new code will start shipping immediately. The case boils down to the fact that A10's founding team came from Foundry Networks, acquired by Brocade in 2008. Brocade's suit included charges of misappropriation of trade secrets and of unfair competition -- and while the jury found A10 guilty of those things, it awarded Brocade only $1 in damages. The jury did find A10 guilty of copyright infringement in using code found in Brocade's products, and that's where the $60 million fine comes from. Brocade's release mentions the court found "sufficient evidence against A10 to award up to another $50 million in lost profits," but the exact amount will be determined in a new trial. A10 contends that the U.S. Patent and Trademark Office has already rejected the patents in question. A10 plans to appeal the entire jury decision, which would include the $60 million awarded Thursday. The AX line, which competes with load balancers from companies such as Brocade and F5 Networks Inc., isn't A10's only product line. It's also got the EX series of traffic management appliances, for instance. But the AX is the startup's flagship product. For more

— Craig Matsumoto, Managing Editor, Light Reading
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