Silvaco vs. CSI trade secrets case headed to trial

Silvaco vs. CSI trade secrets case headed to trial
SAN JOSE, Calif. — Silvaco International and Circuit Semantics Inc. (CSI) are headed for a jury trial after the Superior Court of California refused last month to dismiss a case in which Silvaco charges CSI with using Silvaco source code in its timing and characterization software. Silvaco claims that two employees who left the company in 2000 stole trade secrets and subsequently brought them to CSI.

Silvaco, a provider of technology CAD and analog simulation products, filed suit against two former employees who left Silvaco in 2000 with what it calls "confidential and proprietary" information. When those employees showed up at CSI, that company was added to Silvaco's complaint. Now Silvaco claims to have evidence that CSI's DynaSpice contains identical source code to SmartSpice.

"In a fashion eerily similar to the Cadence-Avanti legal battle, Silvaco is charging that the defendants stole some source code from Silvaco that was incorporated into Circuit Semantics' products, which results in identical output from both tools in some situations," wrote Brad Mook, an analyst at Investec, in his Nov. 4 EDA weekly review.

There is, however, no criminal case with the Silvaco suit, nor does the Silvaco suit allege copyright violation, which was a major component of Cadence Design Systems Inc.'s civil case against Avanti Corp. Silvaco is seeking injunctions, and will pursue legal fees and damages, in what is primarily a trade secrets lawsuit.

"We don't believe there is any credible evidence for these [Silvaco] claims, and we believe we will prevail at the time of trial," said Jose Torres, vice president of marketing at Circuit Semantics. Noting that much of the information in the case is currently under seal, Torres declined to elaborate on Silvaco's charges.

Silvaco initially filed suit against Nikolay Rubanov, an engineer Silvaco brought over from Belarus. According to court documents, Rubanov left Silvaco on April 26, 2000. Silvaco then filed suit against Alaiksandr Antonau, also from Belarus, who left at the same time as Rubanov.

The complaint alleges that Rubanov left with source code listings, floppy disks, meeting notes and other proprietary information. Ivan Pesic, Silvaco's chief executive officer, said he called the police and the FBI and was advised that he could file a civil complaint.

Some months later, Pesic said, Silvaco discovered that CSI was paying the defendant's legal bills; that's how Silvaco discovered where the men went. Pesic declined to elaborate why Silvaco believes CSI's DynaSpice contains SmartSpice code. However, a Silvaco press release states that a "third party" noted extensive similarities in the outputs from Silvaco and CSI products, "which was noted to be reasonably possible only if the products shared the same source code," according to the company's statement.

Rubanov and Antonau once filed countersuits against Silvaco, but those are no longer pending. CSI is handling the defense of both men and the company, Torres said. A trial date has not yet been set.

In early October, Torres acknowledged, the Superior Court of California denied CSI's motion for summary adjucation. "What that basically means is that we need to go to trial," he said. "It's not an indication of what will be the ultimate outcome of the case. The court did not rule, one way or another, on whether trade secrets were misappropriated."

Silvaco has been involved in a number of lawsuits in the past, including the so-called "dumpster diving" case in which Silvaco was accused of going through Technology Modeling Associates' trash. Silvaco later sued TMA, and separately sued MetaSoftware, before both companies were acquired by Avanti. In June 2002, Silvaco won a $20 million judgment from Avanti before Synopsys Inc. announced its intent to acquire Avanti.

All of Silvaco's other lawsuits have been resolved, Pesic said, but the company is vigorously pursuing the CSI case. "I want my code back," he said. "I've been developing SmartSpice for 18 or 19 years, and it's pretty bad for me personally."

Torres acknowledged that the case will have a financial impact on CSI, a 38-person provider of timing and characterization tools for structured custom design. "Lawyers cost money," he said. But Torres insisted there would be no slowdown in product development or customer support.

Investec's Mook isn't so sure. "It is debatable if these two companies, which are small and struggling in the worst bear market to hit semiconductors, have the wherewithal to withstand the financial rigors that inevitably accompany these lengthy legal wars," he wrote in his report.