You get the sense that if 5-year-olds had teams of lawyers at their disposal, it would go down much the way the legal battle between Emulex and Broadcom is going.
Emulex last week sued Broadcom, saying that Broadcom “has acted in an anticompetitive manner,” violated federal antitrust laws and defamed Emulex. Emulex wants money for actual damages, punitive damages, injunctive relief, and of course some cash to feed the lawyers.
Emulex wrote in a statement that the punitive damages are there “to punish and make an example of Broadcom for its alleged ‘malicious’ conduct.” On a side note, I have no idea why Emulex felt the need to put “malicious” in “quotes” (it’s quoting itself, after all) or indeed why it would need to use the word “alleged” in a statement where it is spraying accusations like machinegun fire.
How did we get here? Emulex makes equipment for data center networking, and Broadcom is the big networking chip company that wants to buy Emulex. Broadcom made an unsolicited bid for Emulex in April, which Emulex resisted mightily. Broadcom then raised the bid to about $925 million, and Emulex still turned it down. In fact, Emulex sued Broadcom, claiming that, as one article summed it up, Broadcom is a criminal enterprise, because its co-founders created a culture of illegal drug use, hiring prostitutes, payoffs and death threats that should disqualify the Irvine company from buying its cross-county counterpart.”
Broadcom must have taken those words personally. The company sued Emulex for patent infringement, claiming that Emulex has profited from 10 of Broadcom’s patents.
That’s what Emulex means by defamation, and the company is positioning itself as a David under threat from what it sees as the drug-using, prostitute-hiring Goliath that is Broadcom.
And while these companies waste time with their accusations and their court dates – and waste money on lawyers – somewhere there is a company that is about to eat their lunch.
