Newton firm faces $200m software suit

Software provider CA Inc. is suing rival Rocket Software of Newton for $200 million, alleging that a team of former CA engineers hired by Rocket stole computer source code and trade secrets from their former employer and used them as the basis for technology being marketed as part of IBM's database management software.

The civil action opens a window on the cutthroat competition among vendors in the lucrative field of business software, and especially in database administration software, a market niche that is projected to bring in $1.4 billion in sales this year, according to the lawsuit.

Rocket's successes in that field "actually represent the fruits of Rocket's theft of intellectual property from CA," the lawsuit contends. The Newton company was served with the suit yesterday. CA, the Islandia, N.Y., company formerly known as Computer Associates, filed it on Wednesday in US District Court in Central Islip, N.Y.

"CA is in the business of software," Gary R. Brown, the director of litigation at CA, said yesterday. "This is our bread and butter. And we will do whatever we have to do to protect our rights."

Rocket executives didn't respond to phone calls and e-mails yesterday. The company, cofounded in 1990 by Andy Youniss and Johan Magnusson Gedda, launched several major database software products in December 2000. That was less than a year after Rocket hired four programmers and software developers who had worked at Platinum Technology, a company CA bought in 1999, the suit said.

"Before the former Platinum engineers joined Rocket, one or more of them downloaded onto their laptops and/or other electronic media, or otherwise appropriated some or all of the source code for CA's [database] products," which the Long Island company had acquired from Platinum, a company in Oakbrook Terrace, Ill., the suit alleges. It maintained that this was done "with the knowledge, approval, and encouragement of Rocket's management."

The suit does not seek to implicate IBM Corp., which uses the Rocket technology as part of a larger software suite, called IBM DB2, that it sells to businesses and other enterprises. The software tools are used by database administrators to organize, reconfigure, and update stores of financial, human resources, and manufacturing data.

Intellectual property suits have become common in recent years, as software technology grows more complex and engineers change jobs frequently, said Rebecca Wettemann, vice president at Wellesley consulting firm, Nucleus Research. "When you have so many developers moving from place to place, it's not surprising," she said.

Brown estimated that CA has suffered at least $200 million in lost sales to the Rocket technology. It is asking the court to order Rocket to pay damages to CA and to stop using what it says is the CA source code at the heart of Rocket's database software. The source code is a sequence of commands written in words and mathematical symbols that determine the look, feel, and function of software programs.

Rocket has 20 days to file its response to the CA lawsuit.

The suit said CA began to suspect it was the victim of intellectual property theft in 2001 after Rocket launched a half-dozen database software products and CA customers began remarking about their similarity to CA products. In 2004, the suit said, CA received an anonymous letter, claiming to be from a Rocket employee, alerting it to theft of the CA source code.

When executives at Rocket were notified, they would not submit their products to inspection by a third party, the suit said.

Judith Hurwitz, president of Hurwitz Associates, a technology research and strategy firm in Waltham, said the number of intellectual property lawsuits is likely to increase in coming years. "As the industry gets more competitive, companies will be looking at each other's products more carefully, and saying, 'This IP is mine.' "

Robert Weisman can be reached at weisman@globe.com.