Sun Microsystems Sues Azul Systems Right Back

Published: May 15, 2006

by Timothy Prickett Morgan

Back in March, upstart startup Azul Systems, the maker of network-work attached processors for running Java applications, launched a lawsuit against Java owner Sun Microsystems. And last week, Sun sued Azul right back.

Azul has been tight-lipped about the suit it filed in the U.S. Federal District Court for Northern California, but back in March it said it was "fending off predatory attacks" from Sun. Azul asked for declaratory relief from unfounded claims that Sun is alleged to have made against Azul, including patent infringement and misappropriation of trade secrets. Azul also claimed that Sun repeatedly has threatened to bring out the lawyers if Azul didn't give Sun a stake in itself and pay "exorbitant" up-front fees and ongoing royalties for each sale of its Compute Appliances, which are special Java computing engines that offload JVM work from general-purpose servers.

To combat the suit, Sun has filed its own, claiming that Azul's technology infringes on its patents--specifically related to a memory technology called speculative locking--and that the hiring of a bunch of former Sun employees (including Stephen DeWitt, who used to run Sun's X86 server business) allowed it to cut some corners to get the Compute Appliances to market. Sun is also alleging that the Azul executives who used to work for Sun have misappropriated trade secrets and violated non-compete agreements.

Executives at Sun did not comment on the lawsuit, and neither did Azul this week. But Azul's lawyer, Robert Haslam of the Heller Ehrman law firm, took a few jabs at Sun.

"Even though it was not our first choice, Azul was originally forced into filing for declaratory relief because Sun claimed vague and unsubstantiated threats of patent infringement and trade secret violations in order to back up its demands that Azul give up a significant piece of ownership of the company to Sun as well as huge sums of money. Sun's countersuit validates Azul's original decision to seek protection from the court system. After throwing almost two dozen Sun patents at Azul that Sun said Azul needed to license, Sun now alleges Azul products are only potentially infringing on six Sun patents. Additionally in today's filing, Sun alleges a much narrower trade secret story, albeit still just as vague as before. Sun is correct that Azul spent the last year attempting to reach a reasonable resolution to the issues with Sun, but handing over a piece of the company was not then, and is not now, a reasonable resolution. Sun's initial strategy appeared to be if you can't compete with it, buy it. Having failed with that, Sun now seems to believe that litigation is the best way to compete."

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