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Ethernet equipment

Brocade Fires a Lawsuit at A10

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

Pete Baldwin 12/5/2012 | 4:25:41 PM
re: Brocade Fires a Lawsuit at A10

This reminds me from a lawsuit from about 1998 -- a pre-emptive version of this suit, you might say. 


Company A was trying to block employees from moving to Company B, the argument being that the employees could not possibly work there without eventually giving up some kind of proprietary information.


On a philosophical level, you could argue that's correct. But if you stick to that reasoning, then no one can ever work for a company similar to their employer, ever again.


At the time, I'd intended to follow the lawsuit in case several others popped up, but it never happened, and I think Company A lost the case -- rightfully so. (I'm not 100% certain of the company names; going on long-term memory here.)

Pete Baldwin 12/5/2012 | 4:25:40 PM
re: Brocade Fires a Lawsuit at A10

Another court case to remember: Cadence/Avant.  (Proper company name was "Avant!," with the "!" representing an upside-down "i."  I'm not making this up.)


It was a big, years-long story for Mike Santarini at EE Times. Source code theft, to the point where even copied comments, including misspellings, were supposedly found in Avant! code. Cadence also tailed an employee and claimed to have found him handing floppy disks over to Avant! people (3.5" ones - this wasn't *that* long ago).  It wasn't just a long court case, it was nasty and personal between the CEOs.


I'm not saying A10 did anything like this. The optimist in me hopes they didn't.


As for Avant, the executives eventually pleaded no contest to criminal charges. But the company didn't die; it had built up too much of a customer base. Avant eventually got sold for about $300M.

paolo.franzoi 12/5/2012 | 4:25:39 PM
re: Brocade Fires a Lawsuit at A10

 


I thought the whole inevitable discovery thing went back to a Lucent employee who had to sit out a year or two.


seven


 

MikeSantarini 12/5/2012 | 4:25:39 PM
re: Brocade Fires a Lawsuit at A10

 


 





It does sound like déjà vu all over again. Of course, one would hope that folks learned a lesson from it but unfortunately the lesson they may have learned was that they can indeed get away with it. Avnt tied it up in court for years and while they were ultimately publicly humiliated by pleading no contest--all of the defendants in the Avanti walked away multi-millionaires and only one did hard time--and only a year or so. That person--Steven Wuu--also walked away a millionaire. Avanti had a rigged BoD that agreed to pay all the legal fees and criminal restitution for the individuals. I don’t know if BoD’s can get away with that in the post HSR SarBox era.


Keep on with the good fight, amigo,


Mike





 


 

Pete Baldwin 12/5/2012 | 4:25:38 PM
re: Brocade Fires a Lawsuit at A10

> I thought the whole inevitable discovery thing went back to a Lucent employee who had to sit out a year or two.


Could be.  I was just citing the first case of it that I'd run into.  My impression is that it was an attempt by a big company to shut down a new competitor.


(to clarify, for anyone joining late: I'm talking here about the "Company A" case cited below, not the crazy Cadence/Avant thing.)

Pete Baldwin 12/5/2012 | 4:24:41 PM
re: Brocade Fires a Lawsuit at A10

I made a tweak to some of the descriptions, adding job history to point out that one of the engineer defendants supposedly works at A10, while another does not.

Pete Baldwin 12/5/2012 | 4:22:02 PM
re: Brocade Fires a Lawsuit at A10

Today (Oct. 4), A10 issued a press release responding to this case, and the F5 suit:


http://www.lightreading.com/document.asp?doc_id=197937


 

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