Alternative Dispute

For my business dispute article summary review paper I have chosen Sun Microsystems versus Azul Systems. The battle between Sun Microsystems and Azul is about Start-up, a new software program, Stephen DeWitt, a former Sun Microsystems employee and now chief executive of Azul stole trade secrets, violated his non-compete agreement with Sun Microsystems, and recruited key Sun Microsystems employees to work for Azul. Sun also alleges Azul violated six of its patents.

In March, Azul, a developer of computer appliances to speed up Java applications, filed a complaint against Sun in U.S. District Court seeking to protect itself from a potential patent infringement lawsuit from Sun Microsystems. The two companies had held discussions for more than a year on whether Azul infringed on Sun's patents, but those talks were to no avail.

Sun Microsystems fired back in court against Azul Systems, alleging their start-up violated six of its patents and stole trade secrets. It was the latest volley in what has become an increasingly visible and strident legal fight between the two companies.

Sun Microsystems answered Azul's complaint, filing counterclaims of its own. Sun Microsystems, the Santa Clara computer and software developer contends Stephen DeWitt, a former Sun Microsystems employee and now chief executive of Azul, stole trade secrets, violated his non-compete agreement with Sun, and recruited key Sun employees to work for Azul. Sun also alleges Azul violated six of its patents.

Stephan DeWitt joined Sun Microsystems when it acquired his company, Cobalt Networks, in December 2000. The non-compete agreement DeWitt signed as a condition of the purchase, effective Dec. 12, 2000, prohibited him over the next two years from engaging in competitive business activity related to computer systems or servers, including appliance servers, and from soliciting Sun employees to leave.

In October 2002, DeWitt became the CEO of Azul, which makes network appliances for applications that run on Java, Sun's popular programming language. Sun claims Azul's products compete with its own products.

Sun Microsystems also contends that Azul hired away nine key employees, and that some of those employees were engineers or key product architects with knowledge of Sun Microsystems future products. It also says DeWitt and Azul vice president of marketing, Shahin Kahn, another former Sun Microsystem employee, had access to Sun's customer lists and partners, and that Azul is now marketing their products to Sun customers.

Sun Microsystems also contends Azul developed its products and product strategy based on Sun's plans for its new T2000 server, designed around Sun's multi-core chip, code-named Niagara. Sun alleges key Azul engineers, Cliff Click, Kevin Normoyle and others, all former Sun employees, had access to confidential information later copied by Azul.

"It is unfortunate that we have to resort to litigation in order to settle our dispute with the company, despite repeated business proposals from Sun that were intended to free up Azul and its products to continue to take advantage of Sun's intellectual property without interruption," Sun said in a statement. (Poletti, 2006)

Sun believes Azul's Vega multi-core processor, which simultaneously runs numerous processing threads, or programs, uses several of Sun's trade secrets.

Azul has spent the

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