Former CEO files unfair competition complaint against Xiotech

A team of former Xiotech executives has started a SAN array company, but alleges that their former employer is trying to put them out of business.

Storage startup Compellent Technologies, a SAN specialist founded by a team of executives from Xiotech Corp., has filed a lawsuit against Xiotech to put an end to what it calls "acts of interference and unfair competition."

Phil Soran, a co-founder and former CEO of Xiotech who now serves as president and CEO of Compellent, said "We sued Xiotech because we believe they are improperly interfering with our business."

In response to the complaint, Xiotech filed a lawsuit of its own in which it alleges that four of its former employees - three of whom now work for Compellent - took "proprietary information" with them to found the new company.

Soran said "Xiotech's responsive lawsuit is predictable and completely without merit. We look forward to vindicating our rights."

"Xiotech might be feeling some pain in the channel in order for them to [file a counter-suit] like this," said Tony Prigmore, senior analyst for the Enterprise Storage Group Inc., an analyst firm based in Milford, Mass. "Like so many companies in the storage industry, these two know each other well historically but have two separate products with unique approaches to solving client storage problems."

Prigmore does not believe the legal dispute will impact the average IT decision maker despite Xiotech's attempts to stop Compellent from bringing its technology to market.

Both companies are based in Eden Prairie, Minn., and sell modular SAN arrays. Compellent's Storage Center SAN and Xiotech's Magnitude 3D feature embedded automation, virtualization and replication capabilities that can be managed from a single interface.

Xiotech would not comment specifically on the technologies involved in the lawsuit, but issued a statement regarding the legal battle. "We look forward to trying our case in court," said Xiotech spokesperson Leo Tignini.

Recent storage industry court battles

Compellent and Xiotech aren't the only storage vendors engaged in a legal dispute. In recent months, Network Appliance has slapped BlueArc with a lawsuit over NAS patents and Legato Systems filed suit against NSI Software over asynchronous, real-time data replication technology.

But all good feuds must come to an end -- even in the storage industry. Last month, rival storage switch makers Brocade Communications Systems and McData put an end to a two-year fight over technology patents. McData struck a confidential deal with Brocade and agreed to a three-year "standstill in patent litigation by both sides." Hitachi Ltd. and EMC Corp. have put down their subpoenas and settled a patent infringement lawsuit that has hindered interoperability talks between the companies for nearly a year. And HBA maker Emulex put a number of lawsuits to rest when it reached "tentative" settlements to conclude securities class action and derivative lawsuits brought against the company and certain directors and officers in 2001. The settlements cost Emulex $39.5 million.


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