Nutanix has announced it has filed a lawsuit against database as a service platform Tessell amid allegations its founders covertly built competing products while still employed at Nutanix.
The cloud computing giant filed the lawsuit in the US District Court in San Jose, which alleges that sensitive company information, as well as valuable resources, were used illegally by Tessell’s founders to launch the business.
Nutanix’s filing alleged that Tessell founders Bala Kuchibhotla, Kamal Khanuja, and Bakul Banthia covertly designed, built, exhibited, and secured financing for a future Tessell product while still at Nutanix.
Moreover, the lawsuit claimed that Nutanix source code, servers, and other resources were used by the Tessell founders when creating the product, and that they took the source code across to Tessell after leaving Nutanix.
“KKB [Tessell’s founders] used Nutanix facilities, equipment, services, and even the Nutanix Era source code when developing the Tessell product”, the filing reads.
“KKB planned, developed, obtained initial financing for, and demonstrated prototypes of the competing product—all using Nutanix computers and while they were employed by Nutanix. One of the Tessell prototypes they demonstrated actually ran on Nutanix servers.”
The source code claimed to have been stolen by the group was for Nutanix’s Era database management software suite, now referred to as the Nutanix Database Service (NDB).
The complaint also argued the group tried to remove all indications of Nutanix branding from the Tessell prototype, and further cover their tracks by wiping their company devices.
“When planning their departures, KKB took all or a substantial portion of the Era source code, saved it to private accounts and devices, and Tessell later incorporated Era source code into its product. KKB then wiped their laptops to cover their tracks, an effort that was initially successful.”
Nutanix highlighted “strikingly similar features”
Nutanix claimed the speed with which Tessell was able to launch its competing product, as well as a very similar feature-set, was enough for the company to open a probe into potential IP infringements.
“When Tessell launched its product in late 2022, however, the speed with which it came to market with features strikingly similar to Era caused Nutanix to commence a full-fledged forensic investigation. As a result, Nutanix uncovered the theft of proprietary code and technology described herein.”
The complaint argued that Tessell’s founders’ access to Nutanix source code and resources meant it was able to release their competing product just 18 months after being founded, with support for major databases such as Oracle, Microsoft SQL Server, MongoDB, MySQL, and PostgreSQL.
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“Tessell was able to release a robust commercial product in such a relatively short period of time because it was founded by a group of Nutanix engineers who were instrumental in developing the Era product, and who had access to all of the key technology and source code embedded in Era.”
Nutanix said it is seeking the return of stolen intellectual property, an injunction to prevent further infringement, restitution, and money damages from Tessell.
It also announced it would be commencing separate arbitration proceedings against the Tessell founders concerning the violation of their employee agreements as Nutanix staff.
ITPro has approached Nutanix and Tessell for comment
