EDA has a well-earned reputation as a litigious industry, much to the dismay of customers, investors and even some EDA executives.
In his annual "troublemakers" panel at the Design Automation Conference here Monday (June 4), john Cooley, editor of the EDA tool users' site Deepchip.com, sought to stir the pot (as Cooley is want to do) by bringing up intellectual property litigation currently pending between Mentor Graphics Corp. and Emulation & Verification Engineering S.A. (EVE), the privately held hardware emulation firm based in France. Both firms were represented by executives on the panel.
Cooley explained to the audience that Lauro Rizzatti, EVE's vice president of marketing and general manager of the firm's U.S. subsidiary, had stipulated as a condition of appearing on Cooley's panel that he would not talk about the litigation with Mentor. The two companies are currently fighting legal battle in both the U.S. and Japan over alleged IP infringement.
After explaining that Rizzatti wasn't going to comment on the litigation, Cooley threw open the door for Mentor's representative on the panel, Joseph Sawicki, vice president of the firm's Design-to-Silicon division, to say a few words.
Sawicki was wise enough not to take the bait. Though he declined to comment specifically about the litigation with EVE, Sawicki did say that Mentor understands that customers and others hate IP lawsuits, but that sometimes a firm must take legal action in order to protect its IP if it feels like its rights are being violated.
James Hogan (left) and Gary Smith at John Cooley's "troublemakers" panel discussion at DAC Monday.
Though Cooley didn't get the verbal dust up he was angling for, the conversation did prompt some interesting reaction from two of EDA's elder statesman, James Hogan and Gary Smith, who also sat on the panel. Both said that IP lawsuits in EDA are generally bad for both parties involved.
Hogan maintained that, regardless of the outcome, neither firm truly wins an IP lawsuit. "The closest word to describe it is persevere," said Hogan, a veteran EDA and semiconductor industry veteran and venture capitalist who is now a private investor. According to Hogan, IP lawsuits drain the financial resources of both firms involved and also distract management from potentially more valuable activities. (Despite his stance, Hogan admitted that as an EDA executive he initiated an IP lawsuit or two).
Smith, the longtime EDA analyst who is now chief analyst at his own Gary Smith EDA, had an even more eye-opening take. According to Smith, the lawsuit filed by Cadence Design Systems Inc. against Avanti Corp. in the late 1990s—one of EDA's most famous and salacious legal battles—actually kept Avanti in business three years longer than it would have been otherwise.
According to Smith, the Cadence-Avanti suit—in which Cadence sued Avanti for code theft—had a galvanizing effect on Avanti, resulting in a "bunker mentality" that kept Avanti going longer than it could have without the suit. (The company was eventually acquired by Synopsys Inc. in 2002.)
Smith said that Avanti engineers at the time of the legal battle were the lowest paid in EDA. Despite that, he said, they also worked the longest hours because of the mentality instilled by the lawsuit. A similar occurred during the legal battle between Synopsys and Magma Design Automation Inc. during the middle of the last decade, Smith said. (Magma was also eventually acquired by Synopsys earlier this year).
Smith, who had a long career as a semiconductor industry executive prior to becoming an analyst, also said that years ago a semiconductor firm getting sued would increase sales by 15 percent in a quarter (because customers would buy extra chips out of concern that the products they needed might no longer be available as the result of a court ruling). "It was a great way of having a good quarter," Smith joked.
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