Open hostilities have broken out between software development tools vendors Borland and WebGain. Borland has apparently been threatening WebGain with a patent infringement suit against the company's VisualCafe and StructureBuilder products for some time. It finally filed the suit last week in the U.S. District Court for the Northern District of California, seeking an injunction, monetary damages and reimbursement of costs.
As WebGain tells the story, it was forced by "repeated threats of litigation" from Borland to file a suit on May 31 with the federal court, aiming to prove that there was no infringement. Borland hadn't explained the basis of its claims, WebGain says, and so it engaged third-party industry experts to provide an analysis of the patents in question. Once that work was done, it went to the courts to obtain a declaratory judgment.
Borland, which claims infringements on the basis of seven patents, says it's "disappointed" that WebGain resorted to the courts, "rather than pursue an equitable resolution through a licensing agreement, as we offered." Privately held WebGain, which filed registration documents for an initial public offering in February, was formed around the acquisition of the VisualCafe Java development tool from Symantec at the end of 1999. Borland filed a trade secrets lawsuit against Symantec in 1992, when one of its executives left to work there, and the case wasn't settled until 1997.
WebGain has acquired, rather than built, most of its technology and doesn't have a large pool of patents like Borland does. The company upgraded its WebGain Studio product with version 4.5 last month. It includes VisualCafe, StructureBuilder, TopLink and Quality Analyzer. VisualCafe was acquired from Symantec in December 1999. StructureBuilder, a UML modeling tool, was acquired from Tendril Software in March 2000, and TopLink, a Java-based object-to-relational mapping tool, was acquired from The Object People a month later. WebGain only recently settled an intellectual property suit filed against it by InLine Software over StructureBuilder.
Borland recently launched new versions of JBuilder 5 Personal and Enterprise Studio for Java at its annual user conference in Long Beach, California. And the company posted second-quarter net income of $6.4 million, or 9 cents per share, up from $2 million in the same period last year. Revenue reached $56 million, up from $46.7 million last time. That makes five consecutive profitable quarters in a row -- a big achievement, especially in light of the three years of losses it suffered through previously. Its forecasts for the third quarter are optimistic, with predictions of growth between 20-25% year-on-year and earnings per share of 8 to 10 cents. Strong sales of Java tools were the main driver, the company said.
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