( ESNUG 444 Item 5 ) -------------------------------------------- [04/25/05]
Subject: A Lawyer's Perspective on the Synopsys-Magma Lawsuit
> Again, I'm not looking for yet more arguements of who's right and who's
> wrong in this case (yawn) -- what I'm interested in opinions on how this
> lawsuit might effect or might not effect the end users of EDA tools.
From: Donald Putterman <dputterman=user domain=sideman plot calm>
Dear John,
Your survey was forwarded to me because I've done considerable legal work
related to the EDA industry. For what your readers may find it to be
worth, here's a lawyer's perspective:
1. Almost all software license agreements include indemnification
language to protect the user against lawsuits or other losses that
might arise from use of the software. It's generally pretty
standard. I personally am not aware of any user who was ever
compelled to stop using a product because of the existence of
a patent or trade secret dispute.
2. It's common knowledge that many, many lawsuits and threatened
lawsuits in the EDA industry are either substantially or entirely
based upon strategic considerations -- that is, they're really
intended to stifle competition from newer, more innovative products.
That is why lawsuits are so often brought by larger companies that
cannot provide the same incentives as a start-up (e.g., stock) in
order to keep the brightest young technologists, and which therefore
are the most threatened by new product development. Such litigation
is often intended and conducted to divert the "upstart" company's
personnel and financial resources, discourage investors and possible
purchasers, discourage other technologists from going to work for
the company -- and to discourage possible customers by making them
believe software won't be supported, will become unavailable, won't
be updated, and so on.
In other words, threatening suits against customers is simply part
and parcel of "scorched-earth" litigation conduct typically undertaken
precisely because the attacking party is afraid that it is vulnerable
to a better product marketed by a smaller or start-up competitor.
3. However, I personally am unaware of any company in the EDA industry
actually suing customers for using challenged software. If you
think about it, how stupid would that be? Suing your own actual
or prospective customers? Why would any significant IC company want
to do business with a vendor who sued or threatened to sue them in
these circumstances? If, for example, I were Cadence, and Synopsys
was suing or threatening to sue customers for using Magma products,
I would be down on my knees giving thanks. In fact, Cadence should
already be giving thanks that Synopsys' general counsel is even
threatening to do so. I can't imagine the thought processes at
work there.
This industry is very incestuous, and I always find it entertaining how
companies in such a high-tech field can be so personality-driven (witness
Cadence v. Avanti). Perhaps that accounts for the unusual frenzy which
always seems to accompany litigation in the EDA industry.
- Donald Putterman
Sideman & Bancroft LLP San Francisco, CA
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