(c) 1995 Copyright Nando.net
[1](c) 1995 Associated Press
SAN JOSE, Calif. (Dec 8, 1995 - 03:12 EST) -- Officials at Cadence
Design Systems had suspected for months that several former employees
had stolen trade secrets in the hours before they quit their jobs.
But it wasn't until a computer engineer saw his own bug written into
another company's software that Cadence knew for sure, its president
and chief executive officer Joseph Costello said Thursday.
The San Jose-based electronic design automation company sued Avant!
Corp. and four individuals Wednesday, a day after Santa Clara County
District Attorney officials, the FBI and local police did a 12-hour
search of Avant!'s corporate offices, removed computers and questioned
employees. Avant!'s stock has lost nearly half its value since then.
The suit in U.S. District Court in San Jose alleges misappropriation
of trade secrets, copyright infringement, conspiracy and other
illegalities. It names Avant! chairman and chief executive Gerald Hsu
along with former Cadence employees Mitsuru Igusa, Chih-Liang Cheng
and Opher Segev.
Also on Wednesday, U.S. District Judge William Ingram issued a
temporary restraining order to prevent Avant! from modifying or
destroying any computer code for its ArcCell products. It also ordered
the defendants to notify Cadence within 24 hours of all off-site
storage.
Avant! denies all charges and said it "will defend the complaint
vigorously." No criminal charges have been filed.
In a teleconference Thursday, the company detailed the events that led
up to the search and seizure. It claims the former Cadence employees
left between 1990 and early 1995 to join another company, ArcSys, that
later became part of Avant! It also claims that before they left, they
copied proprietary computer code and took it with them.
In September of 1994, Costello said, Igusa abruptly quit his job and
refused to sign papers saying he would not disclose company secrets.
Suspicious of his refusal, the company checked his electronic mail and
noticed a large transfer of information.
Police later searched Igusa's home and found source code, the computer
coding that makes all product manufacturing possible, he said.
Igusa was later charged and pleaded innocent to six counts of felony
misappropriation of trade secrets.
Cheng and Segev also left Cadence abruptly and appeared to copy source
code, Costello said.
In August of 1995, a Cadence engineer was working with a customer and
noticed a program that looked like something he wrote, himself. Even a
bug in the system was identical to one in his own work, Costello said.
The company launched an investigation that lead up to Tuesday's raid
on Avant! and Wednesday's suit.
Avant! stock fell sharply Thursday for the second day in a row. On the
Nasdaq Stock Market, it dropped more than 32 percent, or $11.37 1/2 a
share, to $23.87 1/2.
It lost 14 percent Wednesday.
Cadence supplies software and services used to design semiconductors
and other electronic products.
The employees who left Cadence founded ArcSys Inc., which later merged
with Integrated Silicon Systems Inc. to form Avant!