Emulex sued Broadcom again today, escalating the legal battle between the two Orange County tech giants.
This time, Emulex is alleging that Broadcom engaged in a campaign of lies to prevent it from gaining a foothold in the Broadcom-dominated market for 10-gigabit-per-second Ethernet devices.
If you’re new to this story, Irvine-based Broadcom tried to buy Costa Mesa-based Emulex last April to get the smaller company’s technology. Emulex rejected the deal, and things quickly got bitter. Emulex sued, declaring Broadcom a criminal enterprise. Broadcom sued, alleging Emulex had infringed on Broadcom patents. The tone has gotten increasingly nasty.
Broadcom issued a statement describing the new lawsuit as ” a diversionary tactic to take the focus off of Emulex’s alleged infringement (of Broadcom patents). Emulex is competing with Broadcom using Broadcom’s intellectual property.”
The heart of the new lawsuit is the competition between the two companies in the network server market. The suit says Broadcom currently controls 70 percent of the market for 10-gigabit Ethernet (10GbE) controllers. Emulex is trying to break into that market with its own products, which it asserts are technologically superior to Broadcom’s.
“To maintain its stranglehold on the 10GbE controller market, Broadcom is trying to stomp out Emulex as a competitor,” the lawsuit alleges. “Broadcom has embarked on a public campaign of lies and distortions regarding Emulex in an effort to deter Emulex’s customers and potential customers from adopting Emulex’s … technology.”
The new lawsuit lavishes attention on what it calls Broadcom’s “storied history of criminal and civil misconduct.” It cites the stock options backdating scandal, which led to a record $2 billion restatement by Broadcom, guilty pleas by co-founder Henry Samueli and former human resources chief Nancy Tullos plus pending criminal actions against co-founder Henry Nicholas and former CFO William Ruehle.
The Emulex complaint even cites a federal lawsuit by a prisoner seeking his release. Randy Lee Soderstrom, an inmate at Folson State Prison, alleges that he delivered drugs on behalf of Broadcom co-founder Henry Nicholas.
Nicholas has pleaded not guilty to federal securities and drug charges and is awaiting two trials on those charges next year.
Read the Emulex press release HERE.
Read more about the Broadcom-Emulex battles:
- Broadcom sues Emulex for patent infringement
- Emulex rejects Broadcom bid
- Broadcom raises bid for Emulex
- Another firm opposes O.C. tech merger
- Shareholder group opposes O.C. tech merger
- Broadcom could raise bid for Emulex
- New deadline for Broadcom’s Emulex bid
- Broadcom details hostile bid for Emulex
- Emulex suit calls Broadcom criminal enterprise
- Emulex appeals to shareholders in Broadcom fight
- Tech giant merger? Broadcom wants to buy Emulex
