Trade Commission Slams Fortinet

Security startup Fortinet Inc. has been barred from importing and selling its anti-virus software within the U.S. by the U.S. International Trade Commission (USITC) after infringing an anti-virus patent from rival Trend Micro Inc..

The antivirus software forms a key element of Fortinets FortiGate device, a sort of security “God-box," which combines hardware-based firewalls with VPN support, intrusion detection, and purpose-built ASICs.

The move follows a Commission ruling that Fortinet violated parts of Trend Micro’s patent 5,623,600 for anti-virus software (see Fortinet Disputes Patent Claim).

Today the USITC announced its “remedy" for the violation, which includes a limited exclusion order on imports. This prohibits “the unlicensed entry of systems for detecting and removing viruses or worms" into the U.S., the Commission documents state. The Commission also hit Fortinet with a cease-and-desist order that prohibits “selling, marketing, advertising, distributing, offering for sale, transferring (except for exportation) and soliciting U.S. agents or distributors” for the systems.

Hal Covert, Fortinet’s CFO, attempted to put a positive spin on events when he spoke to NDCF. “This only affects our U.S. operation,” he said. “Over 70 percent of our revenue is generated internationally.”The exec adds that Fortinet will still be able to support its customers while working on enhancements to its software. “Our goal is to make sure that this whole situation doesn’t impact our business or our customers,” he says. “We’re working with our legal and engineering team, as well as our customer support people so that we can implement these enhancements.”

Covert says he expects the software overhaul to be completed sometime within the next 60 to 90 days. However, the company is also looking to resolve the issue with Trend Micro. “We would like to reach some kind of fair and reasonable agreement with them and we’re trying to do that."

Carolyn Bostick, Trend Micro’s vice president and general counsel told NDCF that there has been some contact, although she was giving little away. “We have had some conversations with them, and we are open to continuing these discussions,” she says.

Fortinet’s technology message certainly appears to be getting through to users. The company has so far shipped 100,000 of its FortiGate devices and is even planning to file for an IPO (see Fortinet Fires Up for IPO). “It certainly isn’t helpful,” Covert says of the dispute. “But if we can get the enhancements in place or settle with Trend in an amicable manner, I don’t think that it will create a major issue for us with regard to the IPO.”

— James Rogers, Site Editor, Next-Gen Data Center Forum0