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Ikos lawsuit against Axis turns more complex

Posted: 15 Apr 2001 ?? ?Print Version ?Bookmark and Share

Keywords:eda patent? dac? axis? ikos?

Two emulation companies enmeshed in a patent infringement lawsuit traded charges and countercharges as the case grew appreciably more complex. "This is clearly black and white," insisted Ramon Nunez, president and CEO of Ikos Systems, which with MIT brought the case against Axis Systems in early February. Not so, said Axis President and CEO Mike Tsai, who held that the suit was precipitated by a failed takeover bid on Ikos' part.

"I think Ikos is worried because we are growing extremely fast," said Axis' Tsai. "We are probably the fastest-growing company in the EDA industry right now. We have been profitable for five consecutive quarters and have a $20 million run rate in our fourth year on the market." Tsai said he declined Ikos' merger offer because Axis plans to make an initial public offering in the near future.

Nunez, for his part, said Ikos has been keeping an eye on Axis since that company launched its emulation products at the Design Automation Conference in June last year. "We have been concerned by the move into emulation by Axis (since) DAC of last year," said Nunez. "During that time, we began the investigation on our own of what kind of technology was behind that product. We concluded that analysis in December. We do not like to pursue litigation unless it is clearly black and white. This is clearly black and white."

The suit filed by Ikos and the Massachusetts Institute of Technology in the United States District Court in Delaware alleges that Axis' Xcite1000 and Xcite2000 emulators infringe MIT's 1994 Virtual Wires technology patent. Nunez claims that the Axis products violate that patent and three others owned by Ikos that improve on the Virtual Wires technology.

Tsai declined to comment on the technical merits of the Ikos and MIT joint claim, saying Axis has not had time to fully review it. Moreover, Tsai said that Ikos tried to broker a merger with Axis, and filed the suit upon being turned down. Tsai said that last February, Ikos invited him to a breakfast meeting, which he said that "During that meeting, Ikos praised our technology, expressed concern that Axis was offering emulation solutions to our mutual customers and suggested that we work together. Then they proposed to acquire Axis. After I politely turned down their offer, they indicated that they would compete aggressively against us. In the afternoon of the same day, they filed the lawsuit."

Tsai said that since Axis introduced its technology at DAC, it has been challenging Ikos' position in the emulation market.

Gary Smith, EDA analyst at Dataquest, said he would not be surprised that Axis is indeed picking up market share in design team hardware-assisted verification. According to Smith's 1999 market study, Axis, with its acceleration technology alone, accounted for 4 percent of that segment of the market, with Aptix at 14 percent, Ikos at 16 percent, Mentor Graphics at 25 percent and leader Quickturn with 40 percent. "Axis did not even have an emulator in 1999, so I think they are growing a whole lot faster now," said Smith.

"We just received the complaints and are still in the process of studying the patents," said Tsai. "We never knew MIT had a patent (in this area) and now we are studying it very carefully." When asked if Axis could have unknowingly violated the MIT patent, Tsai said, "We cannot comment on that because it is complicated.

Steve Wang, co-founder and vice president of marketing, said Axis itself has been diligent about patenting at every step of product development. The company currently owns three patents and has six more pending, he said. "We agree that it is important for companies to protect their patent portfolios," said Wang.

Wang pointed out that lawsuits have been used on several occasions in the EDA industry to stifle competition. Ongoing cases where this has been a defense claim include Quickturn's suit against Mentor Graphics and Cadence's suit against Avanti.

? Michael Santarini

CMP Media





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