Synopsys aims secrets charge at Ambit

Electronic News, March 24, 1997 by Judy Erkanat

Santa Clara, Calif.--Synopsys filed a complaint against Prakash Bhalerao and Ambit Design Systems last month in Santa Clara County Superior Court. The complaint alleges misappropriation of trade secrets; breach of contract; extortion/unfair competition; and breach of fiduciary duty. Synopsys claimed damages of more than $500,000.

Synopsys' senior VP, business development and legal, Paul Lippe, called the case "boring in its details and trivial in its implications." He said when Mr. Bhalerao worked for Synopsys, he signed an agreement not to disclose or compete with Synopsys. "And this is what we believe he is doing now," Mr. Lippe explained. "We feel people should respect their agreements. This is not just about competition. Synplicity, Exemplar and other companies are out there with more mature competitive products than Ambit's, but what Mr. Bhalerao did is out of bounds of acceptable behavior. To leave Synopsys to go to work for a competitor is way out of line."

Although Mr. Bhalerao could not comment on the case for legal reasons, Venktesh N. Shukla, Ambit's VP, marketing and sales, spoke for the defendants.

"We could all speculate as to why Synopsys is bringing this action," said Mr. Shukla. "We have a superior alternative and are confident after doing due diligence that the outcome will be in our favor. Mr. Bhalerao joined Ambit because it has a good potential for success and to have fun while contributing to the effort here. He has no intention of bringing any proprietary Synopsys property to Ambit, nor would we want him to. All areas of business and product development at Ambit were in place when Mr. Bhalerao joined the company. Besides, we are not competing in Synopsys' core competency area."

Ambit's opposition to the complaint said there was no evidence Ambit or Mr. Bhalerao used or were likely to use any confidential Synopsys information, trade secret or otherwise. It said Synopsys was assured before the case was filed Mr. Bhalerao had not and would not make use of any Synopsys trade secrets. It alleged Synopsys wants to use the case to discover Ambit's confidential product and business plans before Ambit's initial product introduction in June.

According to Ambit, Synopsys refuses to describe what it considers trade secrets, except to say it is information regarding current work-in-process, product specifications and employee information, as well as confidential business plans, competitive strategies, technological developments, customer relationships, financial analyses and projections and personnel matters.

"Based on my understanding of the business of Ambit, it is my opinion that the position which Bhalerao accepted at Ambit would by necessity, and by reason of the scope of the duties arising from the position, required Bhalerao, in the performance of the duties of his position, to use and/or inevitably disclose the trade secrets and proprietary information which belongs to Synopsys," said Synopsys CEO Aart de Geus in court papers. "It is my understanding that the technology being developed by and at Ambit is directly competitive with the technology developed by Synopsys, and the information Bhalerao sought and obtained while employed at Synopsys is the type of information which is very useful to Ambit in developing and thereafter marketing its competitive products...This information would be very useful to a competitor such as Ambit..."

Mr. Bhalerao was president and CEO of Silicon Architects, (SiArc), a physical design library company. In April, 1994, SiArc was acquired by Synopsys. From then until September, 1996, Mr. Bhalerao was a VP of Synopsys. He left the company Dec. 31, 1996, and became president of Ambit on Feb. 4.

Ambit said it is not in the business of developing any product or service related to any area for which Mr. Bhalerao had any responsibility during his time at Synopsys. Ambit said he has no documents pertaining to his work at Synopsys, nor has he solicited, nor intends to, other Synopsys employees to work at Ambit.

Ambit also maintained it has nothing to do with physical design libraries for ICs. It said is not an integrator or distributor for third-party intellectual property for ICs, nor the design services arm of Cadence Design Systems, Compass Design Automation or Aspect Technology.

For its part, Synopsys said it received a letter from Mr. Bhalerao's counsel in which he threatened to proceed with his new employment unless Synopsys specifically stated what proprietary information it felt Mr. Bhalerao had. In a separate letter sent Feb. 10 to Mr. Bhalerao's counsel, Synopsys asked for a description of all Synopsys materials currently in Mr. Bhalerao's or Ambit's possession. Among other requests, Synopsys asked for a description of Ambit's business, products and items under development, markets and key competitors, and a description of the extent to which Ambit competed with Synopsys.

Ambit's RTL synthesis tool is currently under beta site development at several of its customers (EN, March 10).