Sun Escapes £69m Lawsuit

Sun Microsystems received some welcome news this week when a jury in Marshall, Texas, turned down a complicated 3-year-old patent infringement and trade secrets lawsuit brought by software development company Versata.

Versata, formerly called Trilogy Software, had sought more than $100 million (£69m) in damages from Sun for alleged patent infringement, breach of contract, interference with an existing contract, trade secret misappropriation and unfair competition.

Versata claimed Sun stole its technology for the WC5 software configurator, which was designed to model a software development project throughout the entire product cycle—from requirements to marketing and sales.

But the jury, following a 10-day process in U.S. District Court for the Eastern District of Texas, didn’t see it that way and gave Sun a clean-sweep victory on the 11 questions comprising the lawsuit.

“It was a very, very complicated case on multiple levels [facts, technology, intellectual property, employment histories of some the principals], and because it involved so many different kinds of charges,” Sun’s head defense attorney, Jeff Randall, told eWEEK. “The patent infringement part of the case could have taken a full week on its own. But Judge [T. John] Ward was very fair and allowed plenty of time, and the jury was attentive and fully understood all the facts in the case.”

Randall, a partner with Skadden, Arps, Slate, Meagher & Flom and head of patent litigation in the firm’s offices in Boston, Washington and Palo Alto, Calif., said the case was further complicated by employees from Versata moving to work at Sun during the years the companies worked together on the project.

Sun commissioned Versata in 1998 to begin work on the software configurator in conjunction with some of its own developers. The configurator was being designed to model every aspect of a software project, including the digital weight of each component, how it connects and interacts with other components—even how it was to be marketed and sold.

“A very simple example of this would be the Dell product Website,” Randall said. Prospective customers can go online to Dell.com and “custom design” a desktop or laptop computer to their liking, adding and subtracting features they do and do not want.

After about three years of pre-development, Sun management decided that the project was not meeting its business needs and transferred the contracts to Oracle to pick up where the first team had left off, Randall said.

“During the first three years, some employees moved from Versata to Sun,” Randall said, and things began to get murky as to who was going to receive credit for individual contributions to the project.

Versata brought the case against Sun in September 2006, Randall said. Versata declined to say if it is going to appeal the decision.

Sun has a legal conflict with storage maker NetApp that is still in the discovery phase.

NetApp filed a lawsuit against Sun in Sept, 2007, seeking damages and a permanent injunction against the company and claiming Sun infringed on several patents regarding NetApp’s own WAFL (Write Anywhere File Layout) file system.

NetApp claims Sun’s ZFS (Zettabyte File System), which is included in Sun’s Unix-derived Solaris operating system, is patterned directly after its own WAFL file system.

NetApp characterized the suit as a defensive step after Sun sought to charge NetApp to license its technology, NetApp officials said.

Sun, which claims to have created ZFS long before it released the code to the open-source community in 2007, has responded with three countersuits of its own against NetApp and its entire product line, seeking both injunctions and monetary damages. Court dates have yet to be set in that legal action.