GraphOn sues Citrix and Insignia

GraphOn has filed a lawsuit against Citrix Systems and Insignia Solutions, accusing them of misappropriating trade secrets and breach of contract.

But a GraphOn spokesman claimed that, although the suit was filed this week, the dispute goes back to late 1996 when Insignia was in discussions with GraphOn about taking it over. The spokesman said GraphOn had revealed proprietary information to Insignia at the time, but the purchase subsequently failed to go through.

GraphOn later discovered that Insignia, which sells virtual machine and emulation software, was working on the same technology that GraphOn had previously revealed proprietary information about, the GraphOn spokesman alleged.

The case became more complicated, however, when Insignia sold its Ntrigue line of products to Citrix, which also makes emulation software. GraphOn attested that it immediately informed Citrix of its claims regarding Insignia and indicated that some of Insignia's offerings could be based on GraphOn's proprietary information.

As a result, Citrix required Insignia to put $8.75m of Ntrigue's purchase price into an escrow account until the matter was resolved.

But in November 1998, Citrix filed a declaratory relief action against GraphOn, seeking a judgement over whether it was infringing on GraphOn's proprietary rights, had misappropriated any trade secrets or breached any agreement to which GraphOn was party.

Because Citrix had failed to release any new products, however, the court had nothing to examine on which to base such a judgement and no ruling was made. As a result, last October, Insignia filed a lawsuit against GraphOn to try and have the money from the sale of Ntrigue released from the escrow account.

This suit accuses GraphOn of unfair business practices, intentional interference in the sale of Ntrigue and a bad faith claim of trade secret misappropriation. The case is still pending.

But according to GraphOn's spokesman, GraphOn has now filed a lawsuit of its own against Citrix and Insignia, claiming that Citrix is currently releasing products that may contain GraphOn's proprietary technology. "We had no choice but to sue to protect our intellectual property," he said.

An Insignia spokesman said that because he had not seen GraphOn's suit, he was unable to comment directly on it. But he added: "We intend to continue to press our multi-million dollar claims against GraphOn filed in October, 1999. Also, we're going to vigorously defend ourselves against what we consider to be the very stale and unsubstantiated trade secret claims on their part."

A Citrix spokesperson said the company did not comment on pending lawsuits.

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