CA sues Quest for source code theft

Computer Associates International Inc. (CA) is suing Quest Software Inc. and four of its employees for copyright infringement and theft of proprietary software code.

Filed July 2 in an Illinois District Court, the lawsuit alleges that the Quest Central database management software suite includes code developed by Platinum Technology International Inc. and now used in CA's Enterprise Database Administration (EDBA) software. The four Quest employees named in CA's complaint worked for Platinum prior to its 1999 acquisition by CA; the complaint charges them and Quest with using EDBA source code as a "template and inspiration" for key Quest Central components.

A Quest spokeswoman said the company has no comment on the lawsuit, which is currently being reviewed by Quest's legal team.

Similarities between Quest's software and CA's include aspects of the user interface, analysis engine, script processor and parser, according to the complaint. Particularly at issue is Quest's DBAide software for use with IBM Corp.'s DB2 database technology, which CA charges was developed by a software team given stolen copies of CA's EDBA source code.

CA first sent Quest letters about suspected misappropriation in 2000, the company said. Quest denied the charges, and CA let the matter drop until last February, when it received an anonymous letter with a Quest return address. The letter, included in the complaint, charges that in late 1999 one of the former Platinum employees now working for Quest distributed to a Quest group CDs containing EDBA's source code and "instructed them to use the source code where necessary to help them meet their dates" on the behind-schedule DBAide development project.

After CA contacted Quest in 2000, Quest staffers attempted to round up and destroy those CDs of source code, along with incriminating code and e-mail backups, according to the letter.

"If you don't believe this letter, just ask the individuals named or members of their groups, I am sure they will not lie. Wouldn't it be great to have all these people pay back their severance and option money because they were stealing code!!!" the letter said.

CA is seeking to recover Quest's profits from the purportedly stolen code, along with an undetermined amount for costs and legal fees. It has also requested a restraining order barring Quest from continuing the alleged infringement.

"If CA can demonstrate that the people who coded the (Quest) project were familiar with the details of CA's code, Quest is going to be on pretty slippery ground," said Gartner Inc. analyst Jim Duggan, who covers both companies. "It's pretty well established that if you're going to duplicate the same function (as a competitor), you have to do it in a clean room by somebody with no knowledge of the code."

Laws governing intellectual property misuse are much clearer than those covering the industry's frequent patent disputes, Duggan said.

"This is really elementary property law," he said. "There have been quite a few cases. The law here is substantially more developed (than patent law). ... If CA can prove their allegations, I think this goes downhill very quickly (for Quest)."

In other CA news, Ranger Governance Ltd. filed Tuesday the preliminary proxy statement outlining its challenge to CA management's board of directors nominations. Ranger is a Dallas investment firm controlled by CA shareholder Sam Wyly, who last year attempted to replace CA's entire board with new directors. This year, Ranger is fielding five nominees and seeking minority representation on CA's board. Among the directors it hopes to oust are CA co-founder and Chairman Charles Wang and Chief Executive Officer Sanjay Kumar.

CA shareholders will vote on board of directors nominations August 29 during CA's annual meeting.