Symantec: Microsoft misappropriated trade secrets to build virtualization tools

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Symantec: Microsoft misappropriated trade secrets to build virtualization tools

Cupertino (CA) – Symantec’s director of legal affairs, Michael Shallop, alleged in an interview this afternoon with TG Daily that Microsoft employed its own programmers to take apart source code from storage virtualization leader Veritas to which Microsoft was not entitled, and then used the information it gleaned from that code to create storage virtualization device drivers for Windows 2000, Windows Server 2003, and forthcoming versions of Windows Vista and “Longhorn” Server.

Symantec merged with Veritas in 2005, and since that time, according to Shallop, attempted to negotiate a new agreement with Microsoft that would have enabled it to use a limited version of Veritas’ Volume Manager technology – with appropriate compensation. While Microsoft refrained from stonewalling, he admits, and probably negotiated in good faith, the company used the information it learned to develop a new class of virtualization driver. If Microsoft were to deploy that driver in Windows Vista and “Longhorn,” Symantec alleges, its distribution would do serious damage to Symantec’s competitive status, as existing agreements explicitly prohibit Microsoft from distributing certain classes of volume manager drivers, Shallop stated.

“There are restrictions on their usage and scope of the technology and associated intellectual property provided from Veritas to Microsoft under that agreement,” Shallop told TG Daily, “and we have evidence that will show through the court process that they violated the restrictions and scope of those license rights under that agreement, and therefore are infringing and misappropriating certain of Veritas’ – now Symantec’s – intellectual property.”

In a complaint filed in US District Court in Seattle yesterday, Symantec tells a story of a company that, in 1996, just couldn’t produce a disk virtualization device driver that would be compatible with all the leading disk storage formats. So rather than upgrade its existing “FT Disk” product for use with Windows NT, Microsoft instead pursued an agreement with Veritas. Under that agreement, as Shallop describes, “Veritas provided to Microsoft a ‘light,’ reduced version of Veritas Volume Manager technology, to be bundled in Windows. Microsoft was not permitted under the agreement to use the Veritas intellectual property to develop certain features that would be added to, or complementary to, that baseline version.”

Those features included some of the most highly touted functionality in today’s Windows Server, including Virtual Disk Service and Volume Shadow Copy Service – a driver which replicates stored data in the background, as a “shadow” volume. Without access to Veritas technology, the complaint alleges, Microsoft would not have been able to build these features.

Symantec goes on to allege that Microsoft withheld certain portions of Windows 2000 source code from Veritas, to which Symantec claims Veritas was entitled, which would have enabled Veritas to verify that Microsoft’s implementation met the scope and restrictions of the agreement. But perhaps the most damning allegation in the entire complaint is a claim that Microsoft had malicious intent. “Unbeknownst to Veritas, even before Microsoft launched Windows 2000 and began improperly using Veritas’s confidential information to develop competing and replacement products,” states the complaint, “Microsoft had filed secret patent applications in which it claimed to own and to have invented some of the very intellectual property provided to it by Veritas.”

“We have evidence that shows that Microsoft used Veritas’ intellectual property, provided to it under this agreement,” stated Symantec’s legal director Michael Shallop, “to develop such features that were restricted from Microsoft from doing so. They also, we believe, used Microsoft programmers to do competitive development, and these are the same programmers that were foreclosed, prohibited from doing so, because they had access to Veritas source code and other trade secret information.”

In a statement issued this afternoon, Microsoft stated it believes Symantec’s claims to be unfounded, “because Microsoft actually purchased intellectual property rights for all relevant technologies from Veritas in 2004.”

As Microsoft perceives its contract with Veritas, it negotiated as far back as 1996 for the right to buy out Veritas’ intellectual property rights in 2004, and exercised that right…just prior to its merger with Symantec. “We have gone to great lengths ensure that our volume management functionality continues to works side by side with Veritas’ products,” Microsoft’s statement added.

From Symantec’s perspective, Microsoft has two options, either of which are acceptable: “One is the enforcement path through the legal process,” said Shallop, “in which case, in the complaint, we’re asking for the removal of any unlicensed intellectual property and technology that is rightfully ours. The other scenario is, that’s more likely through a negotiated resolution – which we have been working on, and there are certain issues which the companies could not get past and get to a resolution – would be a new settlement and business arrangement which would provide the necessary rights Microsoft needs to continue to use certain aspects of the Veritas/Symantec technology and intellectual property.”

The worst-case scenario for Microsoft – which Shallop did not deny to be a possibility, but about which he would not provide specific comment – would be that a federal judge issues an injunction on the sale and distribution of Windows Vista and “Longhorn” Server, pending the removal of the allegedly infringing source code from those products.

For now, both sides acknowledge there will be no open warfare between them. “We value our relationship with Symantec,” writes Microsoft, “and we continue to work closely with them on a wide variety of issues.”

“It’s business as usual on all fronts with the respective companies,” agreed Symantec’s Shallop, “but we do need to resolve this dispute to make sure that Symantec is protecting its intellectual property, because this technology is the leading VM technology and fundamental storage technology on this and other platforms.”