EMC Sues Another Ex

It's set to launch a non-compete lawsuit against an employee who quit to join SANgate, a startup

October 11, 2001

2 Min Read
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EMC Corp. (NYSE: EMC)is at it again, wheeling out the lawyers to go after yet another former employee who left the company to join a startup (see EMC Sues Over Secrets).

In the dock this time will be Doron Kempel, newly appointed CEO of SANgate Systems.

EMC claims that by taking this job, Kempel is breaching the 12-month non-compete clause in his contract. SANgate says it expects EMC to file a lawsuit to that effect at the Suffolk County Court in Boston, this week. Kempel denies the allegation.

"This trick is beginning to wear thin, says Andy Barrengos, technology practice leader at law firm Woodruff-Sawyer & Co. “It’s the David versus Goliath legal tactic designed to disrupt small companies by consuming their attention, time, and money, which are all extremely precious elements at a startup… Meanwhile, Goliath, with all its resources and manpower, pushes on with business.”

EMC, which says it refuses to comment on "pending litigation," would not say how many of these lawsuits it has filed in the last 18 months, but Barrengos believes it must be well into double figures.But does it have a case, this time?

For the past three years Kempel has been VP and general manager of EMC’s media solutions group, responsible for creating streaming video servers and other rich media applications.

He joined EMC from Imedia, a streaming video router company he helped create and sell to Terayon Corp for $100 million. Prior to that he worked as a VC at Israel Corp, an investment company.

Kempel says what he did at EMC was strictly in the domain of rich media, working on video server development and the delivery of streaming video of which storage was just a component. He was a little unclear on exactly what SANgate is building, but it’s a SAN switch/appliance of some kind.

SANgate doesn’t expect to launch this product until the second quarter 2002, so it is keeping the details under wraps. Nevertheless, Kempel is adamant his work at EMC and the information he was privy to while there is not directly relevant “in any way” to what SANgate is doing."EMC’s chances of winning are very limited, but its goal might just be to disrupt us,” he says. “They won’t. Life goes on, whatever EMC does.”

Observers note that EMC continues to send two messages about startup competitors. Publicly, it denies that they are threat -- often claiming not to have even heard of smaller outfits. Privately, it's spending considerable money to restrict their operations by suing key executives.

— Jo Maitland, Senior Editor, Byte and Switch http://www.byteandswitch.com

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