Symantec Cries Foul over Microsoft Use of Veritas Software

Updated: The company files a breach of contract suit in federal court alleging that Microsoft misused trade secrets gained through a licensing deal.

At odds with longtime business partner Microsoft over an intellectual property disagreement and misuse of its Veritas software technology, Symantec has filed a breach of contract suit against Microsoft in federal court in Seattle.

In the lawsuit, Symantec claims that Microsoft misused trade secrets gained through a licensing deal it had with Veritas Software—which Symantec acquired last year—to create its own products, including features being added to the Windows platform, said Michael Schallop, director of legal affairs for Cupertino, Calif.-based Symantec. The trade secrets were related to Symantecs Volume Manager product, which the company acquired as part of the Veritas deal.

In its argument, Schallop says that Microsofts actions, such as incorporating the technology into its upcoming Vista operating system, is in direct violation of the mutual licensing agreement originally signed by the companies in 1996.

Volume Manager enables operating systems to store and extend large amounts of data to help bypass storage hardware limitations. The software also features data recovery and recreation capabilities in the event of a storage hardware failure.

"We basically are seeking to protect our IP," said Schallop. "Were alleging that Microsoft used intellectual property they had access to under the intellectual agreement by ways that were not authorized, to develop products, technology, and features of Windows in violation of agreement."

In addition, in its complaint Symantec alleges that its business partner concealed its misappropriation of the Veritas technology in question by denying Symantec access to Microsofts source code, access that Microsoft was required to give to Symantec under its agreement.

Further, Symantec is saying that Microsoft has filed patents based on particular Veritas trade secrets before officially launching the integrated Microsoft/Veritas product being developed under the mutual license agreement. It also says Microsoft has wrongfully claimed to have invented product components and features that it received from Veritas while wrongfully disclosing confidential Veritas information in the process.

Microsoft currently refers to the Volume Manager product as LVM (Logical Volume Manager) and VDM (Virtual DOS Machine), noted Schallop. He said that Symantec and Microsoft have been negotiating for "at least a year" to resolve its IP disagreement. When an impasse was reached, both parties recently agreed to bring the issue to a third party either for resolution or to help bridge the gap.

/zimages/1/28571.gifClick here to read about how Microsoft and Symantec are battling for supremacy in the security market.

Symantec is asking the federal court to order Microsoft to remove the Symantec IP it was not licensed to use within its operating system products and seeks to recoup proper compensation for the harm Microsoft has caused Symantec throughout this process.

Schallop downplayed the notion of any wide rift between Symantec and Microsoft over the Volume Manager issue, saying the incident is isolated and should not impact other parts of their working technology agreements and mutual product sets.

"This is just really an isolated contract dispute on a very old agreement. We think well prevail, but in the meantime its business as usual with Microsoft," Schallop said.

Microsoft spokesman Jack Evans told eWEEK that the company does not believe the lawsuit will affect the production schedule of its upcoming Vista operating system, due out in January.

A Vista beta release will be demonstrated next week at the companys WinHEC in Seattle, Wash., from May 23-25.


"We believe the facts will show that Microsofts actions were proper," Evans wrote via e-mail May 19.

"Were confident that our actions are wholly consistent with the legal agreements between Veritas and Microsoft, that these claims will be shown to be without merit, and that todays filing will not impact the development schedule for our products."

Evans said that when Microsoft purchased intellectual property rights for all relevant technologies from Veritas in 2004, it included "broad rights" well within Microsofts scope for its use in Vista.

Editors Note: This story was updated to include comment from Microsoft via eWEEK reporter Chris Preimesberger.

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