Avant! Corporation, a Californian software developer, has settled
criminal charges against it by agreeing to pay $27 million in fines
for the theft of software from rival developer Cadence Design
Systems. Directors, employees and former employees will together
pay an additional $8.3 million in fines, some of whom also face
prison terms of up to six years.
The plea bargain struck with California’s district attorney’s
office marks the end to a unique trade secrets case which began
over four years ago and has since been frequently delayed. Jury
selection for the trial began earlier this month. Deputy District
Attorney Julius Finkelstein said yesterday's resolution of the case
“sends a clear message that stealing source code is a serious
criminal offence.”
Avant! entered pleas of "no contest" to conspiracy to
misappropriate trade secrets, trade secret misappropriation, and
securities fraud. In addition to paying $27 million, Avant! agreed
to pay restitution in an amount to be determined by the Court. The
Court directed Avant! to place $10 million into escrow for possible
payment in restitution.
CEO Gerry Hsu pleaded no contest to conspiracy to misappropriate
trade secrets, failure to return stolen property, and securities
fraud. Hsu agreed to pay a $2.7 million fine but escaped jail time.
Avant! employee Stephen Wuu pleaded no contest to trade secret
misappropriation and securities fraud, will pay $2.7 million, and
faces between 16 and 24 months in prison. Mitsuru Igusa, a former
Cadence employee, faces a $27,000 fine and a six-year prison
term.
“Avant! believes that this agreement is in the best interests of
the company, our shareholders, our employees, and customers” said
Paul Lo, Chief Operating Officer of Avant!. “The company concluded
that putting this matter to rest once and for all was the right
thing to do. Avant! no longer sells the product that gave rise to
this dispute, so this decision will have no impact on the company's
current product line. We now look forward to resolving the
remaining civil lawsuit with Cadence.”
