Emulex Hit by Second Digital Suit in 10 Days

For the second time in 10 days, Emulex Corp. of Costa Mesa has been sued by Digital Equipment Corp. for alleged unfair business practices.

The latest suit, filed this week in federal court in New Hampshire, charges Emulex and its engineering director, Charles Hess, with misappropriating trade secrets from Digital’s engineering plant in Colorado Springs. Hess, who was a senior engineer for Digital in Colorado until his hiring by Emulex on July 15, could not be reached for comment.

However, Michael Lewis, Emulex’s chief financial officer, called the accusations “unfounded and ridiculous, especially in light of the facts surrounding Hess’ term of employment with us.” Lewis added that Digital “apparently is unhappy that we hired Hess.”

In June Emulex hired two other former Digital executives: Bill Mathrani, vice president in the storage products unit, and Stan Reese, vice president in the communication products unit. Neither was named in the suit. Digital officials could not be reached for comment.

Earlier this month Digital sued Emulex in the same court for alleged patent infringement. The suit claims that certain Emulex “add-on” computer products violate Digital patents because the products can be plugged into Digital computer products. The suit seeks an injunction against sales of the products and unspecified damages for lost sales.

Emulex officials have said the suits are an effort to push Emulex out of the computer peripheral business and come at a time of pinched profits throughout the computer industry. According to Lewis, Emulex products give buyers of peripheral computer equipment an alternative to Digital products, often at prices far below those at which Digital sells the same type of accessories.

“Digital would like its customers to only hook up to its products,” Lewis said.