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August 25, 2010
Startup A10 Networks Inc. got off the ground with the help of former Foundry Networks employees, and that's now led to a lawsuit by Foundry's owner, Brocade Communications Systems Inc. (Nasdaq: BRCD).
Brocade is suing A10 and executives, including A10 founder and CEO Lee Chen, claiming patent infringement, trade secret misappropriation, breach of contract, and other related charges.
More simply, Brocade is accusing A10 of being a copycat. The startup, according to the suit, chose to compete with Foundry's traffic-managing gear by recruiting Foundry's employees, illegally using their knowledge of Foundry's products and customers, and copying -- or coming very close to copying -- some of Foundry's source code. (Brocade acquired Foundry in 2008; see Brocade to Acquire Foundry and Brocade Takes Aim at Cisco (& Juniper).)
Chen and A10's early employees "embarked on a strategy to unlawfully leverage all aspects of [Foundry's] confidential and proprietary information in order to form a 'turnkey' enterprise to compete unfairly" against Foundry and now Brocade, the suit claims.
The complaint was filed Aug. 4 in US District Court for the Northern District of California.
Court complaints tend to be exaggerated, so it's amusing to see public companies say A10 has been picking on them. In April, F5 Networks Inc. (Nasdaq: FFIV) filed a patent suit where it claimed that practically everything about A10, even the name, was a calculated attack on F5. (See F5 Sues A10.)
The Brocade suit is bigger, though, because of the accusation of source code theft and because it singles out certain Foundry employees.
A Foundry founder, Lee Chen also founded A10 (Dr. Seuss, eat your heart out), and he made no secret of the fact that his startup drew from his pool of Foundry friends.
Such hiring would seem to be commonplace in Silicon Valley, but Brocade claims this case is severe enough to count as "interference with prospective economic advantage," as the charge is phrased. Another charge is breach of contract, as Foundry employees' agreements include the usual clauses about not giving up proprietary information.
Alongside A10, four individuals are listed as defendants: Chen, Rajkumar Jalan (A10's chief technology officer and former chief architect of Brocade's ServerIron, according to the suit), and former Foundry engineers Ron Szeto (described in the suit as an A10 software manager) and David Cheung (who, according to the complaint, also worked at Brocade, until March, but apparently was not hired by A10).
The suit also names 20 Foundry/Brocade employees who'd been recruited to A10: 13 hired to engineer A10's first product, called the AX, and seven hired later for the sales and marketing team. The suit drops really, really strong hints but does not directly accuse the engineers of using their Foundry-proprietary knowledge. It does claim that the sales and marketing recruits improperly used trade secrets in order to sell A10 gear to their old Foundry customers.
Brocade is asking for unspecified damages and for A10 to give back all alleged proprietary information, including source code.
The company also wants the court to order that defendants disclose "the names and whereabouts of all persons to whom, and entities to which, such information has been further distributed." Given that the AX was announced almost three years ago, that part could take a while.
A10 declined to comment, citing a policy of not discussing ongoing litigation.
— Craig Matsumoto, West Coast Editor, Light Reading
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