Compaq Crying Server Foul

Accuses RLX of using ex-employees to develop its new high-density tool

A startups plans to market a new cooler-running high-density server is drawing heat from Compaq Computer Corp., which claims that the company is using trade secrets illegally obtained from ex-Compaq workers to "jump-start" the effort.

In particular, Compaq alleges in a lawsuit filed late last month that executives working on its high-density server, code-named Ice, were hired to work on a similar product at RLX Technologies Inc. RLX is headed by one of Compaqs co-founders, Gary Stimac, and has done "some very targeted and predatory hiring of Compaq personnel," said Rick Becker, director of software marketing and business development for Compaqs Industry Standard Server Group.

"Its our belief that they started hiring not to just deliver a product, but targeted Compaq personnel to jump-start their server program," Becker said.

Compaq claims that at least 15 former employees have been hired in recent months by RLX, based in The Woodlands, Texas. On Feb. 23, Compaq obtained a temporary restraining order against RLX, barring the company from compromising Compaqs intellectual property rights through the recruitment of Compaq employees. A hearing on Compaqs allegations against RLX is scheduled for this week in the District Court of Harris County, Texas.

"We think their claims have no merit, and were going to fight the charges vigorously," said Kevin Bohren, RLXs vice president of business development and a former Compaq employee. "Were not doing anything differently than Dell Computer [Corp.] did in the late 90s when it sought to get into the server business; they hired Mike Lambert, Gene Austin and several [other] people from Compaq. Theres nothing going on here that doesnt go on in the industry every day."

Compaqs Becker said the Houston-based company believes RLX recruited its workers "based not on their skill sets and capabilities but more focused on what they know and who they know regarding contacts, intellectual property and trade secrets."

Last month, RLX unveiled plans to produce a thin server called the Razor. Unlike current popular rack-mounted servers that feature a "pizza-box" design, the Razor is what is known as a "blade," or vertically oriented architecture. Its high-density design enables data server users to stack up to four times as many servers per rack as is currently possible.

In addition, RLX plans to use cooler-running, low-power processors from Transmeta Corp., which would consume less energy than todays most popular Intel Corp. processor-based rack servers. The processors could significantly reduce heat and energy demands associated with large server racks, an increasing concern as more companies have come to rely on server farms, which feature hundreds of servers.

Compaqs lawsuit alleging "predatory" hiring is not uncommon in the industry. Last year, Intel accused a maker of high-speed chips, Broadcom Corp., of recruiting its workers to obtain proprietary secrets.

In that case, a judge criticized Broadcoms assessment of its recruiting process, calling the explanation "not credible." Broadcom agreed to an out-of-court settlement, the details of which were not disclosed.