Cadence Wins Round in Suit With Avant

A federal appeals court dealt a major legal setback to Avant Corp. on Tuesday when it overturned a lower court’s ruling that spared Avant from withdrawing a major portion of its software from sale pending a copyright infringement lawsuit by Cadence Design Systems.

The U.S. 9th Circuit Court of Appeals in San Francisco held that a trial judge erred in March when he decided not to grant Cadence’s request for a preliminary injunction against the sale of allegedly plagiarized software products.

Fremont-based Avant was created in 1991 when four engineers left Cadence to form their own company. Other Cadence employees also left for Avant. Cadence alleges that they took chunks of the company’s programming with them.

Both companies sell software that helps engineers design the intricate layouts of computer chips. Cadence sued Avant in 1995 for allegedly stealing some of its copyrighted source code to create new software products, including ArcCell and Aquarius.

In March, a trial court judge concluded that San Jose-based Cadence was likely to succeed at trial on its claim that the company’s copyrighted source code was lifted by Avant. But the judge decided to permit Avant to continue to market its products and allow Cadence to proceed with a claim for monetary damages for lost sales.

But the appeals court said Tuesday that the trial court judge was wrong. “The District Court erred by assuming that an injunction would be improper even if the Aquarius software infringed on Cadence’s copyrighted source code,” it wrote.

The appeals court also ordered the judge to issue an injunction barring the sale of Avant’s ArcCell products and to consider blocking the sale of Aquarius software.

Avant shares dipped 44 cents to close at $33.06 on Nasdaq. Cadence shares fell 88 cents to close at $53.56 on the New York Stock Exchange.