A Californian court has issued an indictment charging Avant! Corp, along with eight other individuals, with criminal offences related to the long running stolen code dispute with rival chip design software house, Cadence Design Systems Inc. The indictment (a charge that calls for a case to be brought to trial) was issued by the Santa Clara County Criminal Grand Jury and alleges conspiracy to commit trade secret theft, conspiracy to commit securities fraud, theft of trade secrets, inducing trade secret theft and committing a fraudulent practice in connection with the offer or sale of a security. Avant!’s chief executive, Gerald Hsu said, the rehashed allegations against Avant! are the ones raised three years ago by our main competitor, Cadence. We will continue to prevail in the market, and we expect vindication when the facts are heard in a court of law. Hsu is one of the individuals named in the indictment and if he is convicted, he faces up to 12 years in jail. The company could also incur fines reaching into millions of dollars. The charges stem from a civil law suit filed by Cadence back in December 1995 which alleges that the core of Avant!’s chip design software product, ArcCell, was stolen from Cadence’s comparable product following the defection of several key employees from Cadence to Avant!. At the start of December (CI No 3,555) a district court lifted the stay preventing this civil case from proceeding prior to the conclusion of the criminal case which issued Thursday’s indictment. This same court also issued an injunction preventing Avant! form selling or supporting the successor product to ArcCell, called Aquarius. ArcCell was already subject to a similar injunction. Avant!’s business has yet to suffer any serious set-backs from these injunctions, however, because it has consistently moved onto to developing and selling newer products before the injunctions have bitten. Avant!’s current product, called Apollo, has yet to be affected by any injunctions and in its last quarter through September, the company increased total revenues by 50% to $58m. Avant! maintains that its most recent product contains none of the disputed code which Cadence insists has been stolen. Avant!’s shares closed down 1.3% at $13.94 on Thursday, down 53% since May.
