Avanti criminal charges dismissed

Avanti criminal charges dismissed
SANTA CRUZ, Calif.—One of the longest-running and most-watched criminal cases in the electronics industry has come to an apparent halt, as a Santa Clara County court judge dismissed all criminal charges against executives of Avanti Corp. on procedural grounds. While the district attorney will seek an appeal, and may re-convene a grand jury to seek new indictments, any new trial date is at least months away.

The criminal case originated in late 1995 with a police raid on Avanti headquarters following Cadence Design Systems' allegations of source-code theft. Cadence filed a civil suit against Avanti, which is still ongoing despite injunctions against two obsolete product lines. After many delays in the criminal case, a trial was set to begin May 15.

In the criminal case, Gerry Hsu, Avanti president and chief executive, and six other defendants were facing the possibility of long prison terms and multi-million dollar fines. Hsu, the other defendants and Avanti have all professed innocence and portrayed the legal action as a vindictive attempt by Cadence to regain lost market share in IC physical design.

In a surprise action Friday, Judge Kevin Murphy granted Avanti's motion to dismiss the case based on claims that the grand jury transcripts were incomplete. At issue were the district attorney's instructions to court reporters to not record certain communications to the jurors.

"We're grateful for the court's ruling, and believe the judge made the correct decision," said an Avanti spokesman.

A Cadence spokesman noted that his company is not directly involved in the criminal case, and that the latest ruling has no bearing on the civil case, where Cadence is seeking hundreds of millions of dollars in damages from Avanti.

But Murphy's ruling doesn't mean the case is over, said Julius Finkelstein, deputy district attorney for Santa Clara County. He said his office has already filed a notice of appeal, and has the right to re-convene another grand jury and seek indictments, although this decision has not been made.

"The court dismissed the indictments on procedural grounds based on a lack of transcripts of the DA's comments to the grand jury," Finkelstein said. "The court's action had nothing to do with any evidence of guilt. The only practical effect is to delay the case further and regrettably cause witnesses to appear before a second grand jury."

Finkelstein noted, however, that the appeals process could take a year or more. But he said his office doesn't have to wait for an outcome in order to re-convene a grand jury and seek new indictments.