A10 Networks and its CEO have been ordered to pay punitive damages of $112 million to Brocade after a San Jose, Calif. federal court jury ruled that A10 infringed Brocade's upon intellectual property and engaged in unfair competition.
According to a statement from Brocade, a jury for the U.S. District Court for the Northern District of California in San Jose found for Brocade on three claims of patent infringement involving A10 AX series load balancers, that A10 misappropriated four Brocade trade secrets, and that A10 directly copied proprietary Brocade code from Brocade ServerIron products for use in A10 products.
The jury also found in favor of Brocade on unfair competition charges, specifically that A10 CEO Lee Chen had directly recruited an engineer to work at both A10 and Foundry -- which was acquired by Brocade in 2008 -- simultaneously, thus violating his Foundry work agreement.
The ruling brought Brocade v. A10 Networks to a close after a three-week trial and two years of increasingly nasty legal maneuvers. Brocade first sued A10 in 2010, and both Brocade and A10 petitioned the court last summer to block sales of each other's products.
Chen himself is the biggest link between the two companies, having founded Foundry and served as vice president of software engineering until departing in September 2004.
He founded A10 that same year, bringing aboard several ex-Foundry employees during A10's startup stage. Chen and three other employees -- Rajkumar Jalan, A10 CTO and former Brocade engineer, and former Foundry engineers Ron Szeto and David Cheung -- were called out specifically in the initial suit, in which Brocade also alleged that Chen set up the company that became A10, Raksha Networks, while still a Foundry employee.
Brocade did not provide a copy of the court ruling, which at press time couldn't be verified from court records online.
Tyler Wall, Brocade general counsel, said Brocade is "grateful for the jury's service and close attention to the evidence."
"While litigation is a last resort, in this case the jury plainly felt that it was warranted. We are pleased that jury agreed with us on our arguments and for handing us this major victory in court," Wall said in a statement.
A10 has not officially commented on Brocade's statement of the court ruling. A spokesperson for A10 did not respond for a request by CRN for comment Tuesday morning.
UPDATE: A10 Networks mid-day Tuesday released a statement saying it would take "all appropriate action to set aside the adverse verdict and to reverse the award of damages."
A10 describes the San Jose jury's decision as a "mixed verdict finding no liability for most of the copyright claims and certain state-law claims and no willful patent infringement, and finding damages of only $1 for the trade-secret claims and interference-with-contract claims."
A10 said the jury awarded less than $2 million to Brocade in total patent damages. It also said that the 145 lines of A10's implementation of the publicly available "Aho-Corasik" algorithm which the jury found to constitute copyright infringement were removed from A10's products last year.
"The jury rejected Brocade's claim that A10's current source code infringed Brocade's copyright," the statement reads. "None of A10's employees was found liable for any of Brocade's intellectual property claims."
"A10 Networks is and always has been committed to innovation and providing the Application Networking market with cutting edge technologies that deliver the industry's best performance, flexibility and value to customers. We will take the appropriate legal actions, and continue to stand by our position that we do not infringe any of Brocade's intellectual property," A10 CEO Chen said in the statement.
PUBLISHED AUG. 7, 2012