In a statement, San Jose, Calif.-based hyperconverged infrastructure provider Nutanix said it does not have a history of filing lawsuits, but called the facts of the case, which was filed in U.S. District Court in Northern California, “too nefarious to ignore.” It wants a judgement against Tessell that forbids the company from making, selling, distributing its products, all “gains, profits, and advantages” derived from Nutanix’s patent, as well as damages. Nutanix said Tessell was created by violating the same patents that the founders of San Ramon, Calif.-based database-as-a-service (DBaaS) company Tessell authored when they worked at Nutanix.
“It has been shocking to learn of the behavior of these former employees during their employment, the scope of what they took from Nutanix, and the steps they took to hide their use of Nutanix resources to found their company,” said Tyler Wall, Nutanix’s chief legal officer, in a statement. “Nutanix believes strongly in fair competition and its importance and value to the industry overall, and it is with deliberate and thoughtful consideration that we have decided to file this lawsuit. The facts that our investigation uncovered were egregious. We look forward to presenting our evidence and proving our claims in the litigation.”
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Nutanix said like its own Era product, Tessell’s product uses database software platform that supports many of the same database engines as Era, Oracle, Microsoft SQL Server, MySQL, PostgreSQL, and MongoDB.ADVERTISEMENT
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In its statement, Nutanix called the employees’ actions “too nefarious to ignore”
“Nutanix believes in innovation, but stealing intellectual property and source code is not innovation. Nutanix does not have a history of suing companies or people,” the company stated. “The facts found in this situation were too nefarious to ignore.”
CRN has reached out to the three named employees — Bala Kuchibhotla, Kamaldeep Khanuja, and Bakul Banthia — directly via LinkedIn, but has not yet received a response. The three engineers were “active participants in the Nutanix patent program,” and authored patents used in the Nutanix Era product.
Kuchibhotla and Khanuja left Nutanix on March 31, 2021 and “less than 24 hours later Kuchibhotla” filed the paperwork to create Tessell. Before departing, Khanuja uploaded a large portion of Era source code to his iCloud account, the suit states. Banthia left Nutanix that May. Three more employees – all of whom had worked on the patents used in Era – also left Nutanix to join Tessell. The company emerged from stealth in October 2022.
In its suit, Nutanix said it was alarmed at how quickly Tessell had pulled together a product for market and so it launched an internal investigation to determine if its resources had been used.
“Nutanix conducted a forensic analysis of how (the Tessell founders) used Nutanix’s computers and IT resources, while still employed at Nutanix. That review established they had agreed to start their own business by Mach 2020 … the Accused product bears a striking resemblance to the vision and roadmap that Kuchibhotla had created and promoted for Era and Nutanix since his early days at Nutanix.”
In the lawsuit, Nutanix said it had not been for the stolen code and other Nutanix resources, the three could not have made a competitor.
“Tessell would not exist but for its theft of Nutanix code and intellectual property,” the lawsuit states.
This isn’t the first time that Kuchibhotla had been in hot water for his actions while at Nutanix.
The U.S. Securities and Exchange Commission said he sold 7,475 Nutanix shares and executed a series of “illicit trades” of bearish transactions in Nutanix options contracts prior to Nutanix announced disappointing quarterly earnings results for its second fiscal quarter of 2019. Nutanix’s stock price dropped 32.7 percent on March 1, 2019, the next trading day. Kuchibhotla realized $292,980 in profits and loss avoidance, according to the regulatory agency.