Prolific blasts pre-IPO magma: Company is cagey about suit specifics but says it wants more than the $3 million in lawsuit

Electronic News, Nov 19, 2001 by Gale Morrison

Prolific Inc., a provider of automated standard-cell creation software, said last week that it is seeking above and beyond the $3 million in breach of contract damages in its ongoing suit against brash EDA up-start Magma Design Automation Inc.

Prolific went public with a statement last Monday following a news report on the August-filed complaint. The Santa Clara County Superior Court filing "asserts claims against Magma for breach of contract, fraud and deceit, unfair business practices and intentional interference with prospective economic relations."

Prolific reiterated last week in a press statement that the claims stem from Magma's alleged failure to perform under an OEM distribution agreement between Prolific and Magma. The complaint alleges that Prolific developed a Magma-specific version of its Liquid Cells cell-generation software for Magma's BlastFusion physical design system but that Magma refused to pay Prolific as required by the agreement.

Newark, Calif.-based Prolific claims that Magma's conduct has caused Prolific at least $3.15 million in damages. The complaint also seeks an unspecified amount in punitive damages based on Magma's allegedly "willful, fraudulent, [and] oppressive" behavior, including Magma's allegedly false representations regarding "the reliability, stability and customer base of Magma software.

The public clash comes as Magma, based in Cupertino, Calif., gives indications that pricing for its IPO is imminent. It's not known exactly when the offering will come as the company is under the Securities and Exchange Commission's quiet-period restriction from making statements that could affect the market for its stock, which will trade on the Nasdaq under the symbol LAVA. For the same reason, a Magma spokeswoman could only say what the company has already said in its most recent 5-1 filing: "Magma will vigorously defend its position."

Dan Nenni, VP of marketing at Prolific, said it's important to note that his company believes Magma should pay more than the suit's specified $3.15 million figure. "We are seeking punitive damages well above and beyond the original contract amount of $3.15 million," he said. Beyond that, though, the company did not provide specifics of the alleged oppressive behavior or misrepresentations.

Prolific said it is continuing to move forward with its Liquid Cells software. Prolific has successfully integrated Liquid Cells with other SPR software flows, which would be those of Cadence, Synopsys and Avant!

Rajeev Madhaven, Magma CEO, has been closely watched by the chip design community since he founded a company that looked to be ready to compete with synthesis leader Synopsys Inc. Madhaven sold that company to Synopsys archrival Cadence Design Systems Inc. for hundreds of millions of dollars. Chip design has been waiting to see if he could manage a repeat performance with a successful IPO ending.

RELATED ARTICLE: Prolific at a Glance

* Founded in 1995 by Paul de Dood

* EDA tools to standard-cell manufacturers

* Products include ProGenerate, ProSpin, ProSticks and ProMigrate