Secret grand jury to hear Avant! criminal case

Secret grand jury to hear Avant! criminal case
FREMONT, Calif. — A change in the prosecution's legal tactics is apparently underway in the 18-month-old criminal case against Avant! Corp. involving six of the company's executives. The case will be sent to a secret grand jury, according to Avant!

Julius Finklestein, Santa Clara County Deputy District Attorney, declined to confirm the report. "Grand jury matters are confidential," he said.

The apparent change in tactics may represent some frustration on the part of the district attorney's office over the length of the case. Although Gerry Hsu, president and chief executive officer of Avant! (Fremont, Calif.), and the other executives were charged on the basis of a criminal complaint in April 1997, the matter has not yet come to trial. The defendants have not been indicted, which is the function of a grand jury.

The criminal case stems from allegations that Avant! stole source code from Cadence Design Systems Inc. (San Jose, Calif.). A civil case based on these allegations is also in process. Avant!'s ArcCell products, no longer sold, were banned from the market as a result of the civil proceedings.

Finklestein noted that California felonies can be prosecuted in two ways — by issuing a complaint and holding a preliminary hearing, or by seeking a grand jury indictment, which would supersede any existing criminal complaint. Citing the requirement on confidentiality in grand juries, Finklestein declined to elaborate on his office's strategy. "All I can tell you is that we are going forward with the prosecution," he said.

David Stanley, Avant! general counsel, was critical of the new approach. "Instead of presenting the evidence in a public forum, they're trying to present it in a secret, private forum," he said. "It's an indication of the difficulty the DA has with this case."

Stanley predicted the grand jury hearing will have little impact on the timetable or outcome of the case. "We don't think we did anything wrong, and we're not afraid to have discussions in a public forum," he said.

A Cadence spokeswoman said the company is "glad to see things are proceeding," but had no comment on the apparent grand jury investigation.

Finklestein said his office is hopeful the case will move forward. "What is unusual about this case is the extent to which the defendants have been able to delay and derail the prosecution," he said.

The next court date in the criminal case is a Nov. 10 hearing on Avant!'s preemptory challenge to the presiding judge, according to Finklestein. He declined to give any estimate of when the case might come to a conclusion.