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Avanti ordered to pay $182 m. in damages to Cadence

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CIOL Bureau
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After pleading "no contest" to a number of criminal trade secret

theft charges Avanti, a leading provider of semiconductor design software, was

ordered this week to pay $182 million in damages to arch rival Cadence Design

Systems. Interest charges will push the damage award over $200 million.

It is the first in what is likely to be a series of potentially devastating

financial blows that may end up putting Avanti out of business.

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The damage award was issued in the criminal case against Avanti by San Jose

Superior Court Judge Conrad Rushing.

Avanti had been accused of stealing Cadence computer code for the

development of the now-discontinued ArcCell product line on which Avanti built

itself into a chip design powerhouse.

At Cadence, executives said they were pleased with the ruling, which is

certain to boost its chances to win a $1 billion civil damage lawsuit against

Avanti. "This ruling is a clear sign that the court recognizes the

importance of protecting intellectual property and establishes that trade

secret theft will not be tolerated in Silicon Valley," said Cadence CEO

Ray Bingham said.

In addition to the $182+ million damage award, seven current and former Avanti

employees were ordered to pay a total of $8 million in fines. Avanti President

and Chief Executive Gerry Hsu, a former Cadence employee, agreed to pay a $2.7

million fine after pleading no contest to conspiracy, failure to return stolen

property and securities fraud.



With so much legal uncertainty hanging over its head, analysts speculated that
the company's best chances for survival may be to work out some kind of

settlement with Cadence, one that may be financial very painful but would keep

the company in business and remove the lawsuits which is scaring away

investors.

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