War declared: vMatrox vs. Nvidia

[Dr Mordrid]

Heads up guys. War has been declared;

First NVIDIA introduces the GeForce2 MX:

"the first GPU designed specifically for the volume PC market. NVIDIA's newest GPU includes two new powerful features, Digital Vibrance Control and the TwinView display architecture...."

Sounds like the G400's VCQ2 and DualHead to me. Hmmm.... does the "MX" suffix stand for "Matrox"?

The rest is at;

http://www.nvidia.com/News.nsf/nvidianews62800d.html

Then this appears in the MSN MoneyCentral stockmarket pages;

http://moneycentral.msn.com/investor...sp?Symbol=NVDA

Basically Matrox has sued NVIDIA for getting product info from a former Matrox employee and NVIDIA has sued Matrox for what amounts to unfair competition.

Matrox certainly seems to have the better case....

Dr. Mordrid


[This message has been edited by Dr Mordrid (edited 12 July 2000).]

[This_Idiot]

For those who haven't checked this out, this is the text from NVidia's release. I haven't so far managed to talk to either company about this matter, although I will be trying to do so. Under the circumstances I wouldn't be expecting to get much in the way of response. Certainly the gist of the battle would appear to be the legal right of an individual to choose his/her employer with freedom versus the rights of a manufacturer to ensure that professional secrets don't get carried across to a future employer.

"Item 1. Legal Proceedings

On February 22, 2000, Graphiques Matrox, Inc. and Systemes Electroniques
Matrox Ltd. (collectively "Matrox") filed suit against us in the Superior
Court, Judicial District of Montreal, Province of Quebec, Canada. The suit
alleges that we improperly solicited and recruited Matrox employees and
encouraged Matrox employees to breach their Matrox confidentiality and/or non-
competition agreements. The suit by Matrox seeks, among other things, certain
injunctive relief. We believe that the claims asserted by Matrox are without
merit and we intend to vigorously defend this suit.

On May 19, 2000, we filed suit against Matrox in Santa Clara County Superior
Court alleging that Matrox's efforts to prevent its current and former
employees from pursuing employment opportunities with us constitute
interference with prospective economic advantage and contract and unfair
competition. Our suit seeks, among other things, unspecified monetary damages,
a declaration that Matrox's confidentiality and/or non-competition agreements
are unenforceable under California law and a declaration that its use of those
agreements and other tactics constitutes unfair competition. On May 26, 2000,
the case was transferred to the San Jose Division of the United States District
Court for the Northern District of California."

[Dr Mordrid]

That arguement was settled in the States and Germany by the case of the GM vice president who took propriatory information to Volkswagen a few years ago. VW and the ex-GM VP lost bigtime.

By extension NVIDIA should be asking to settle....fast.

Dr. Mordrid

[Brian Ellis]

Doc

It's not quite as simple as that. I don't know the specifics either of this case nor the legal statutes and, more important, jurisprudence in the countries/states/provinces in question but I can state some generalities about this kind of question.

There are two totally opposed notions here: the right to maintain one's intellectual property (be it hardware or software) and the right to obtain employment. As a general rule, in many places, an employment contract forbids obtaining a job with a direct competitor for a given length of time, usually 1 year. If this kind of clause exists, then it may be that the ex-Matrox personnel may be in infraction, in which case Matrox would have to sue him for breach of contract. Damages awarded would probably be notional. On the other hand, if he took any documents with him and transferred the contents to his new employer, then both he and the employer deserve what they get (this is the VW case basis) because this is both criminal and a civil offense. In many places, jurisprudence admits that what an ex-employee carries in his head is work experience and he may use it legitimately in any subsequent job which does not otherwise contravene the employment contract, but just one single scribbled note on the back of an envelope is sufficient to nullify this concept.

Some jurisdictions severely limit competitive work clauses in employment contracts or the notion of competition becomes limited to strictly direct competition. For example, if I worked for MS as a software guy writing Word and I left to go to Corel, I may not work on WordPerfect for a year, but I could work on Quattro Pro or any other part of the suite. Not knowing the whys and wherefores of this case, I could imagine many non-competitive scenarios. For example, if I worked on a video concept at one company and a display card at another, this would possibly not be considered as competitive in a court of law.

I know a wee bittie about this because I have had cases where the ex-employer of someone I hired has cried foul, but it never went to court as there were no questions of illegal activity. In most such cases, it is a scare tactic to try and throw a competitor off-balance and never comes to anything. If the defendant is a public company, such devices are often used as a form of insider trading strategy. The day before the complaint is filed, the plaintiff sells off his shares in the defendant's company. The day after, he buys to the same value 5 or 10% more shares than he had before because the value has dropped as soon as it is revealed that the defendant has a suit filed against him. He then announces he is dropping the suit: the share prices rebound upwards ... et voila!

------------------
Brian (the terrible)

[Dr Mordrid]

What you're talking about happens post-rehire and can be ambiguous.

Gleening a bit from the NVIDIA PR release it seems they are also being accused of what amounts to industrial espionage. Matrox is accusing them not only of spiriting away a knowledgeable employee and using his knowledge to clone features, VCQ2 and DualHead specifically, but also of having that person solicit product design information from Matrox employees WHILE HE WAS STILL EMPLOYED BY MATROX.

That is a definite no-no.

Dr. Mordrid

[Fred H]

Hmmm.... does the "MMX" suffix stand also for "Matrox"?

[NedNurk]

from the universal declaration of human rights:

Article 23.
(1) Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment.

It's an interesting problem.
Ned

[DosFreak]

Geesh,

So I guess 3dfx should sue Nvidia for "copying" FSAA? They should also sue ATI too right? Oh no! How about T&L too? Get a grip.

[This_Idiot]

I guess that we'll all have to wait and see, I still don't have any official word and I doubt that I will while this is in the hands of the legal eagles.

Certainly here in the UK employers are not permitted to restrict the movement of their employees, although in my own trade (as a freelance consultant) we are subject to contractual obligations regarding future employment (although these restrictions are still illegal under european law and on dubious legal ground).

I agree with Doc that the pivotal point here would be whether a Matrox employee had actually filched documents or forwarded confidential info while still an employee.

But sabre-rattling is part of the marketing game, so whether this will actually come to anything is still to be seen.

On the dual-head issue, since Matrox weren't the first to come up with it, it would be a bit difficult to claim rights unless they can prove espionage