Flash startup Pure Storage fights EMC in trade-secrets battle

A legal war between EMC and flash startup Pure Storage has escalated to charges of patent infringement and illegally obtaining a storage array to mine it for intellectual property.

The fight has exposed competitive tensions surrounding all-flash arrays, which are expected to play a growing role in data centers as enterprises seek faster data access and more efficient storage platforms. Pure is a specialist in all-flash gear that started shipping in 2011, while the venerable EMC is aggressively pursuing the market through its acquired XtremIO division.

EMC sued Pure earlier this month in a Massachusetts federal court, charging that the startup hired 44 of its former employees and got them to hand over confidential EMC information in violation of their employment agreements. On Tuesday, Pure denied those charges and filed a counter-complaint that alleges EMC secretly took a Pure product across the country and into XtremIO headquarters. Only hours after that filing occurred, EMC sued Pure in a different court for alleged patent infringement.

Both companies say their rival’s actions were part of an ongoing pattern of unfair competition. EMC’s suit over the 44 former employees followed a series of such suits it had filed against former employees. This was the first time it had gone after Pure itself.

“The activities advanced and directed by Pure Storage are part of a systematic and unlawful strategy to identify, target and convert valuable EMC assets for Pure Storage’s benefits as Pure Storage seeks to brand itself as an ‘innovator’ in the enterprise storage market, apparently as part of its pre-IPO strategy,” EMC said in its Nov. 5 complaint. Dozens of former EMC employees have stolen “tens of thousands of pages” of confidential information from EMC, the company said.

Pure has countered its larger rival’s charges with its official denial as well as blog posts by its CEO, Scott Dietzen. Writing on Tuesday, Dietzen said “a vendor harassing former employees that freely choose to join a competitor,” among other things, should be “out of bounds” in the rivalry between the companies.

Counterclaim

But Pure’s counterclaim is even more scathing. The startup charges that a Massachusetts system integrator bought a Pure Storage FlashArray FA-320 device in October or early November 2012, saying it would be used by one of its subsidiaries in New Hampshire. Instead, the company shipped the array to EMC, with which it had a longtime relationship. Specifically, the box was shipped to the Silicon Valley headquarters of the XtremIO division, at EMC’s expense, Pure said. XtremIO’s own all-flash array was still under development at that time. EMC even used its own corporate UPS account number for the shipment, according to the counter-complaint.

The system integrator, Continental Resources (ConRes), had arranged for Pure engineers to set up the system at the New Hampshire site, Pure said. Instead, it hid the fact that the device had been moved to EMC and got Pure to help set up the array at XtremIO via a videoconference. EMC employees secretly participated in the installation, Pure said.

In early January, after Pure started pressing ConRes about where the array was, EMC sent it back to the New Hampshire facility, where Pure employees picked it up but “found the machine damaged to such an extent that it could not be reused or resold,” the counter-complaint said. In the month or so that EMC had the array, it had accessed and retained a copy of the boot drive containing proprietary software, Pure said.

Soon after, ConRes admitted it had sent the array to EMC, and EMC admitted it had copied the boot drive, according to Pure. “EMC also acknowledged that it had learned from its access to and use of the Product and Software,” Pure said in its claim.

The episode violated its end-user agreement with ConRes, among other things, Pure claims. Its complaints against EMC from the episode include breach of contract and misappropriation of trade secrets.

EMC’s action against Pure in the Delaware court on Tuesday is conventional, by comparison. It accuses Pure of using patented EMC technologies, including innovations in data deduplication and in scheduling read and write operations for solid-state storage. The startup did so in a bid to catch up with EMC, which has been developing flash storage since 2005, EMC said.

In a statement, EMC reiterated its allegations against Pure.

“The facts remain – Pure Storage has waged a deliberate, unlawful campaign to steal EMC intellectual property. This latest patent infringement lawsuit is further evidence that Pure Storage has engaged in unauthorized use of EMC’s proprietary and patented technology. Again, we are simply taking the necessary legal action to protect EMC’s rights.”