[ISN] Network Associates Sues ISS (followup)

From: mea culpa (jerichot_private)
Date: Tue Jul 21 1998 - 12:02:55 PDT

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    Forwarded From: "Spencer, Will" <wspencert_private>
    (contributed by Kathy Ivens, updatenewst_private)
    Last week, Network Associates (NA) brought suit against Internet Security
    Systems (ISS) for patent infringement, claiming that the ISS RealSecure
    product violates a patent owned by NA. The products NA claims the patent
    covers are the NA CyberCop tools included in Net Tools Secure. The merger
    of Network General and McAfee Associates created NA. 
      I spoke with Patrick Taylor, director of strategic marketing for ISS,
    who said the lawsuit is without merit. He accused NA of using the suit to
    retard the growth of ISS and hinted that ISS is considering countersuits.
      Taylor said that before NA filed the suit, ISS President and CEO Tom
    Noonan received a call from an institutional investor, who reported that
    William Larsen (CEO of NA) had publicly stated in a meeting of investors
    that he was filing the suit. Taylor said the caller quoted Larsen as
    saying, "That should slow down their sales." Taylor said the caller
    expressed outrage about Larsen's use of such tactics. 
      Taylor continued that ISS is familiar with the patent NA cited in the
    suit, which was originally held by Haystack Labs. Trusted Information
    Systems (TIS) purchased Haystack, and NA subsequently purchased TIS.
    "We're comfortable and confident that there is no case of intellectual
    property infringement," Taylor said. He added, "We never got a phone call.
    [NA] went straight to court. They've done this before; they're fairly fond
    of using the courts for business tactics." 
      "When you're the leader in a fast-growing market, other companies try to
    bully their way into your space," Taylor said. "They use heavy- handed
    tactics instead of competing effectively with products and customer
    satisfaction. We feel like David in a David and Goliath battle." (In fact,
    ISS is not a David in this field; the company enjoys the largest market
      Taylor expressed optimism that the court will recognize the suit's lack
    of merit. He declined to be more specific about the nature of any
    countersuits ISS was considering because of Larsen's alleged public
      Art Wong, who is the director of intrusion protection at NA, denied that
    Larsen made the statements that the institutional investor alleged. "It's
    completely untrue. [Larsen] said nothing to that effect," Wong told me,
    adding, "I don't know where they got their information." 
      Wong insists that NA's lawsuit is nothing more than a normal desire to
    protect a patent. "We have a whole suite of products; this patent affects
    a small portion. The CyberCop suite is just a part of our Net Tools Secure
    suite, and CyberCop Network is the product that has to do with this
    patent. It sells well, and in fact the whole Cybercop suite has been
    accepted very favorably. It's really just a matter of protecting our
    intellectual property." 
      Wong stated that he is sure the technology used by RealSecure is the
    same technology that is protected by the patent. He added that he has no
    way of knowing whether ISS knew about the patent when it introduced
    RealSecure, but he said he'd leave that to the courts to decide. 
      "We've long been known as an innovator, and that's a position we have to
    protect," Wong told me. The suit asks for treble damages for any willful
    infringement of the patent, and also asks the court to provide injunctive
    relief by stopping the manufacture and sale of RealSecure. 
      The Federal District Court for the Northern District of California has
    not yet set a date for the courtroom drama to begin. Stay tuned. 
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