Cadence Presents Court With New Evidence of Copying in Request for Extended Injunction Against Avant
Aquarius Cited for Copyright Infringement, Trade Secret Theft; Cadence to Seek More Than $1 Billion in Damages at Civil Trial
July 9, 1998 02:30 PM
SAN JOSE, Calif., July 9 /PRNewswire/ -- Cadence Design Systems, Inc. CDN today presented the United States District Court in San Jose with new evidence of copyright infringement and trade secret theft by Avant Corporation. The Company asked the court to extend the preliminary injunction order already in place against certain Avant products to include Avant's Aquarius product line. In a detailed filing with the Court, Cadence argued that: "Aquarius would not exist as a workable product without Avant's misappropriation of Cadence trade secrets, and Aquarius therefore should be enjoined."
In addition, Cadence asked the court to lift the stay that has stood in the way of the case proceeding to a full civil trial that would decide on a permanent injunction and financial damages, arguing it is increasingly concerned about the financial viability of Avant and its ability to pay the more than $1.2 billion in damages Cadence will seek at trial.
"The evidence of copyright infringement and trade secret theft against Aquarius is as compelling as it was against ArcCell, so we are optimistic the Court will treat it similarly and remove it from the market," said Jack Harding, president and CEO of Cadence. "And now that we have quantified the damages we feel due us as result of these crimes, we're hopeful we can have our day in court in front of a jury as quickly as possible so that justice can be fully served in this matter."
The new filing by Cadence is a result of more than six months of technical analysis of the Aquarius product by independent experts. The analysis concludes: "Once again there is clear evidence of literal copying of ordinary unrestricted English text" from Cadence's code into Avant's Aquarius software, according to MIT Professor Randall Davis. The filing identifies three main areas of code copying from Cadence's place-and-route and database products: compaction code; database code; and human interface code. The expert's analysis identified code contained in the already-enjoined ArcCell product existing unchanged today in Avant's current version of the Aquarius product. The Court already found that direct copying by Avant had taken place when it issued a preliminary injunction against Avant's earlier-generation ArcCell product in December 1997.
Also, in response to an earlier invitation by the Court, Cadence presented evidence that the copying of Cadence's Design Framework II code also represents trade secret theft, an act which allowed Avant to leverage many years of Cadence research, testing, design work, and proprietary customer feedback for the purpose of getting its place-and-route products to market faster. In its brief, Cadence argued that its source code and database clearly falls within the legal definition of "trade secret." The filing outlines how the database code stolen by Avant is the central point for coordinating all operations of place-and-route products, and illustrates how that code's trade secrets have been used in successive generations of Avant products, including Aquarius.
Cadence also asked the Court to allow the case to go to a full civil trial as quickly as possible and to lift the stay the Court had imposed while the criminal case against Avant and six of its executives proceeds, arguing, " ... it is now clear that the criminal case will not proceed to trial this century." Supported by an economic analysis by University of California-Berkeley professor David Teece, Cadence's filing stated through 1999 Cadence will have suffered direct damages of more than $600 million as a result of lost sales of place-and-route products and other related products and services. That amount, combined with at least an equal amount in punitive damages that Cadence will ultimately seek, results in a potential situation in which "it is extremely unlikely that Avant will be able to pay a damage award against Cadence if Avant's infringement is allowed to continue unchecked." The filing cited the fact that Avant has only about $129 million in cash assets on hand. Cadence included a calculation of additional damages for which Avant will likely be liable, including outstanding judgments and pending securities fraud claims by shareholders, that could put Avant's total financial liability at more than $1.5 billion.
Cadence concluded its argument to expedite a civil trial by summarizing the sequence of events involved in the case: "If this case does not proceed to trial for another four years, Avant will have succeeded in stealing code from Cadence in 1991, avoiding detection of theft until 1995, and deferring the day of reckoning for over 10 years -- until 2002. Such as result is unconscionable."
"The most important objective for us is to gain relief from the Court from being forced to compete against our own technology," said Harding. "That can only be accomplished by having the offending products removed permanently from the market and by Cadence being compensated for the complete range of damages we've suffered over the past several years."
About Cadence
Cadence Design Systems, Inc. provides comprehensive services and software for the product development requirements of the world's leading electronics companies. Cadence is the largest supplier of software products, consulting services, and design services used to accelerate and manage the design of semiconductors, computer systems, networking and telecommunications equipment, consumer electronics, and a variety of other electronic-based products. With more than 4,000 employees and 1997 annual sales of $916 million, Cadence has sales offices, design centers, and research facilities around the world. The company is headquartered in San Jose, Calif. and traded on the New York Stock Exchange under the symbol CDN. More information about the company, its products and services may be obtained from the World Wide Web at cadence.com.
NOTE: Cadence is a registered trademark, and the Cadence logo is a trademark of Cadence Design Systems, Inc. All others are properties of their holders.
SOURCE Cadence Design Systems, Inc.
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