A database divorce - Informix Software suing Oracle over potential theft of trade secrets - Company Business and Marketing

Software Magazine, March, 1997 by Anne Harrison

Did 11 former employees from the Portland, Ore., product development laboratory of Informix Software Inc. defect to arch-rival Oracle Corp. after an intense recruitment effort? Or were they feeling neglected? The developers aren't talking, but the incident has set a precedent for the exodus of intellectual capital.

Don DePalma, a senior analyst at Forrester Research Inc., Cambridge, Mass., says the group became urban folk heroes when they developed the Dynamically Scalable Architecture (DSA) and the XPS parallel database that propelled Informix into the major leagues. In 1995, when Informix bought Illustra Information Technologies Inc., DePalma says the focus shifted to object/relational databases. "The people from Illustra became the new divas of Informix displacing the Portland princes," he says. "The people in Portland felt less loved than they had been."

Dan Berkowitz, director of public relations at Oracle, Redwood Shores, Calif., says the former Informix employees, who are now working on Oracle's Network Computing Architecture at a location in Portland, were restless at Informix and shopped themselves to Microsoft Corp. before landing at Oracle. However, Cecilia Denny, public relations manager at Informix, Menlo Park, Calif., contends that the developers were happily engaged in DSA technology that is a key part of Informix's Universal Server. "[Oracle] didn't have the comparable technology and they wanted to make sure they got it and they went after these people specifically for a reason," she says.

Informix is now suing Oracle over the potential theft of trade secrets. Gary Kelly, a former vice president in Informix's product development group, is also being sued by Informix for breach of contract, breach of fiduciary duty, unfair competition and misappropriation of trade secrets.

Informix has also filed a temporary injunction preventing its former employees from divulging trade secrets and is in the discovery process to see if material was transferred. "We instructed them not to bring anything with them; we told them to clean out their computers, not to bring anything in their cars and check their homes," says Oracle's Berkowitz. "We wanted to be sure that developers are coming to us clean and simple with their brains and nothing else."

As the dispute is hashed out in court, however, it's the contents of those brains that may be the most contested property. Forrester's DePalma points out that the database business is often incestuous, but Informix is asking the court to monitor their former employees to prevent information from the Informix code stream from ending up in the Oracle code stream. "There is a lot of knowledge of product line and product plans and it will be up to the courts to decide what they can and can't lay claim to," says Informix's Denny.