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Sun Countersues Azul, Turns Up Ugly Dial

Sun Microsystems countersued rival server startup Azul Systems for infringing on six patents, misappropriating trade secrets and breaking non-competition agreements.

Sun is asking for a jury trial and requesting that Azul pay damages, punitive damages and that it be enjoined from making products with Sun technology.

The latest legal arrow comes six weeks after Azul filed suit against Sun to shield itself from Sun's legal action.

Sun claims that Azul CEO Stephen DeWitt left Sun in 2002 to lead Azul, and lured several former Sun colleagues to Azul to help him build network-attached servers based on technology from the larger server maker.

"Simply put, he broke this agreement when he joined Azul, recruited a number of key Sun employees and developed products and product strategy based on Sun's innovation rather than its own," Sun said in a statement.

"By hiring away key former Sun employees, Azul improperly accessed Sun's technology and plans, which enabled Azul to accelerate introduction of its products to market."

Sun said Azul is using microprocessor technology from its purchase of Afara Websystems, which made microprocessor technology Sun eventually used to create its UltraSparc T1 chips.

These chips power Sun's UltraSparc T1000 and T2000 lines.

Sun claims that if Azul were to continue to use its technology culled from six specific processing patents that it would jeopardize its ability to sell the T1000 and T2000 machines.

"We can understand that Sun's T2000 eliminates the market opportunity for Azul, but resorting to litigation is no way to achieve viability," Sun said.

Sun also urged Azul to honor the GPL license under which SPARC has been released. Sun opened up certain high-level technical details about its chip architecture late last year.

Sun and Azul met several times last year to discuss a way to settle the issue without litigation.

But Sun said Azul refused to agree on business proposals "that were intended to free up Azul and its products to continue to take advantage of Sun's intellectual property without interruption."

Azul's legal counsel said "no surprises here" in response to Sun's filing in a Californian district court.

"Azul has spent the last year negotiating with Sun while they have threatened us with belligerent requests to be granted a significant ownership in Azul, in addition to cash and royalty payments, without providing any justification for those demands," said Bob Haslam, an attorney for Heller Ehrman, LLP, the firm that is representing Azul.

Haslam also argued that Sun's suit is not about Azul technology but about Sun's attempt to knock out a competitor in the market for powerful computer servers.

This argument forms the basis of Azul's defense and echoes what DeWitt told internetnews.com after it filed suit to protect itself from the allegations it knew Sun would formulate into its own suit.

DeWitt said Sun's ultimatum and refusal to validate the merit of its claims proves the company is trying to bully Azul by using its larger size to bog down Azul resources at a time when the smaller company is gaining momentum.

"We believe that this is purely competitively motivated," DeWitt said. "The adoption of network-attached processing as a platform is clearly viewed by Sun as a threat.

He said the company is accusing him of using trade secrets he gained when he worked at Sun, which he joined after the systems vendor acquired computing appliance maker Cobalt Networks.

DeWitt said he led Sun's foray into Linux computing before retiring in 2002 to "recharge his batteries."

He later met Azul founders Scott Sellers, Gil Tene and Shyam Pillamalari, none of whom had a connection to Sun, and agreed to join Azul.