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Sophos And Fortinet End 2-Year Legal Feud Over Patents, Talent, Secrets

Though neither company admitted any wrongdoing, Unified Threat Management competitors Fortinet and Sophos have settled their outstanding legal disputes, which started with talent poaching allegations and included accusations of unfair competition and secret stealing.

Unified Threat Management competitors Fortinet and Sophos have settled outstanding litigation that began with allegations of talent poaching and included accusations of patent infringement, secret stealing and unfair trade.

The settlement, in which neither company admitted wrongdoing, was revealed Wednesday in a brief announcement posted on the London Stock Exchange, where Sophos, based in Abingdon, England, is listed as a publicly traded company.

The statement didn't provide much detail, other than to say that the two companies had signed a settlement after mediation, though "neither party admitted any liability." Sophos also agreed to make a one-time payment to Fortinet, but the amount was not specified.

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Both Fortinet and Sophos declined to comment further on the settlement announcement.

The two vendors are neck-and-neck competitors in the Unified Threat Management space, listed by market researcher Gartner as two of only three leaders in the 2015 Magic Quadrant for the category.

The settlement brings to a close a two-year legal journey. The battle kicked off with the 2013 addition of former Fortinet executive Mike Valentine to lead Sophos' global channel program as well as Sophos' hiring former Fortinet exec Kendra Krause as vice president of channel sales, Americas. Krause is now vice president of global channels and Valentine is senior vice president of worldwide sales.

At that time, Sunnyvale, Calif.-based Fortinet filed a lawsuit against the vendor, which claimed that Valentine violated his contractual duties to Fortinet by bringing Krause and other employees over to his new company. Sophos CEO Kris Hagerman at the time called the claims "baseless" and said Fortinet was trying to stop Sophos' momentum in the UTM market.

The lawsuit also alleged that Valentine and colleague Jason Clark had poached trade secrets from Fortinet, resulting in the infringement of six patents.

The companies resolved the executive claims in March, but the claims of patent infringement, interference with contract, misappropriation of trade secrets, conspiracy, aiding and abetting breach of fiduciary duty, and unfair competition remained.

PUBLISHED DEC. 10, 2015

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