PATRICK PREMO (CSB No. 184915) [email protected]2 DAN KO OBUHANYCH (CSB No. 255160) [email protected]3 FENWICK & WEST LLP Silicon Valley Center 4 801 California Street Mountain View, CA 94041 5 Telephone: 650.988.8500 Facsimile: 650.938.5200 6 MICHAEL A. FARBSTEIN (CSB No. 107030) 7 maf @farbstein.com FARBSTEIN & BLACKMAN, APC 8 411 Borel Avenue, Suite 425 San Mateo, CA 94402 9 Telephone: 650.554.6200 Facsimile: 650.554.6240 10 Attorneys for Defendants II ENSUANT, INC., PUNEET ARORA, BASANTH GOWDA and NELSON PETRACEK 12 RECEIVED AUG 2 6 'lUll DAVID H. YAMASAKI Chief Execu\1VO OfttC8,{CIorl< "- $ "_, Court of ':Sf\ ..> • 13 14 SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SANTA CLARA 15 16 17 18 19 20 21 22 TIBCO SOFTWARE, INC., a Delaware Corporation, Plaintiff, v. ENSUANT, INC., a California Corporation, pUNEET ARORA, an Individual, NELSON PETRACEK, an Individual, BASANTH GOWDA, an Individual, and DOES 1 through 100, inclusive, Defendants, ENSUANT, INC., a California Corporation, 23 pUNEET ARORA, an Individual, NELSON PETRACEK, an Individual, BASANTH 24 GOWDA, an Individual, 25 Cross-Complainants v. 26 TIBCO SOFTWARE, INC., a Delaware 27 Corporation, and DOES I through 100, inclusive 28 Cross-Defendants. AMENDED CROSS-COMPLAINT CASE No .: 1-lO-CV-174346 Case No.: 1-10-CV-174346 AMENDED CROSS-COMPLAINT FOR: 1) D ECLARATORY RELIEF; 2) INTENTIONAL INTERFERENCE WITH ECONOMIC RELATIONSHIP; 3) INTENTIONAL INTERFERENCE WITH CONTRACT; AND 4) UNFAIR COMPETITION Second Amend. Compo Filed : July 25,2011
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II ENSUANT, INC., PUNEET ARORA, BASANTH GOWDA and NELSON PETRACEK
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RECEIVED AUG 2 6 'lUll
DAVID H. YAMASAKI Chief Execu\1VO OfttC8,{CIorl< "-
$"_, Court of ~ Co{'i'3.~!.~EP'JlY ':Sf\..> •
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SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
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TIBCO SOFTWARE, INC., a Delaware Corporation,
Plaintiff, v.
ENSUANT, INC., a California Corporation, pUNEET ARORA, an Individual, NELSON PETRACEK, an Individual, BASANTH GOWDA, an Individual, and DOES 1 through 100, inclusive,
Defendants,
ENSUANT, INC., a California Corporation, 23 pUNEET ARORA, an Individual, NELSON
PETRACEK, an Individual, BASANTH 24 GOWDA, an Individual,
25 Cross-Complainants v.
26 TIBCO SOFTWARE, INC., a Delaware
27 Corporation, and DOES I through 100, inclusive
28 Cross-Defendants.
AMENDED CROSS-COMPLAINT
CASE No.: 1-lO-CV-174346
Case No.: 1-10-CV-174346
AMENDED CROSS-COMPLAINT FOR:
1) D ECLARATORY RELIEF; 2) INTENTIONAL INTERFERENCE
WITH ECONOMIC RELATIONSHIP; 3) INTENTIONAL INTERFERENCE
WITH CONTRACT; AND 4) UNFAIR COMPETITION
Second Amend. Compo Filed : July 25,2011
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Defendants and Cross-Complainants Ensuant, Inc., Puneet Arora, Nelson Petracek. And
Basanth Gowda (collectively “Defendants” or “Cross-Complainants”) allege:
1. This is an action for declaratory relief, intentional interference with economic
relationship, intentional interference with contract, and unfair competition. The value of Cross-
Complainant’s rights at issue exceeds the jurisdictional minimum of this Court for unlimited
jurisdiction.
THE PARTIES
2. Defendant and Cross-Complainant Ensuant, Inc. (“Ensuant”) is now, and at all
times material hereto has been, a California corporation. Defendant and Cross-Complainant
Puneet Arora resides in Santa Clara County, California. He was a Chief Technical Officer at
TIBCO until his resignation in July of 2009. Mr. Arora founded Ensuant in October of 2009.
Defendant and Cross-Complainant Nelson Petracek resides in Calgary, Alberta, Canada. He was
Director of Field Operations at TIBCO until December of 2009 and is now employed by Ensuant.
Defendant and Cross-Complainant Basanth Gowda resides in Lake Bluff, Illinois. He was an
Architect at TIBCO until April of 2010 and is now employed by Ensuant.
3. Plaintiff and Cross-Defendant TIBCO Software Inc. (hereinafter referred to as
“TIBCO” or “Cross-Defendant”) is now, and at all times material hereto has been, a Delaware
corporation with its principal place of business located at 3303 Hillview Avenue, Palo Alto CA
94304.
4. The true names and/or capacities, whether individual, corporate, associate or
otherwise, of Cross-Defendant DOES I through 100, inclusive, are unknown to Cross-
Complainants who therefore sue said Cross-Defendants by such fictitious names. Cross-
Complainants are informed and believe and thereon allege that each of the Cross-Defendants
designated as ROE are responsible in some manner for the events and happenings herein referred
to and proximately caused injury and damage to Cross-Complainants as herein alleged. Cross-
Complainants will amend this Cross-Complaint to allege their true names and capacities when
ascertained.
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5. Cross-Complainants are also informed and believe, and thereon allege, that at all
times herein mentioned, each of the Cross-Defendants were the agent, servant, and employee of
each of the remaining Cross-Defendants, and were acting within the scope and purpose of such
agency, service and employment.
6. Cross-Complainants are also informed and believe and thereon allege that each of
the Cross-Defendant DOES I through 1-100 were, at all relevant times, a member, officer,
manager, and/or agent of TlBCO who acted in concert with and/or provided material assistance to
TlBCO for the purpose of violating Cross-Complainants’ rights, as hereinafter alleged. TlBCO
and Cross-Defendants DOES 1 through 100 are sometimes referred to collectively hereafter as the
“Cross-Defendants.” “Cross-Defendants” and “Cross-Complainants” are sometimes hereafter
collectively referred to as the “Parties.”
7. Defendant and Cross-Complainant Puneet Arora is a Silicon Valley entrepreneur
with expertise in Complex Event Processing (“CEP”). CEP software enables companies to
process the large amounts of data they accumulate relating to events occurring externally and
internally to their businesses. CEP software takes advantage of technological advances in
computer hardware and cloud computing to improve event monitoring and processing within
companies. Arora began working with TIBCO in 1999, and in 2003 led the team that developed
TIBCO’s CEP software, BusinessEvents.
8. After years of successfully leading TIBCO’s BusinessEvents software to a
dominant position in the market, Arora decided to leave TlBCO to explore different ideas. In
October 2009, he formed Ensuant, Inc. as a platform to use his skills and explore his ideas in
enterprise software applications including CEP software and services. Although not competing
directly with TIBCO, TIBCO immediately determined that Arora and Ensuant threatened its
market position. Rather than responding competitively in the marketplace, TIBCO proceeded to
file a lawsuit accusing Arora of soliciting TIBCO employees and inducing TlBCO employees to
break their non-competition clauses with TIBCO. TIBCO then moved to inform Ensuant’s
customers that TIBCO was suing Ensuant and warned them not to deal with Ensuant or Arora.
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9. TIBCO’s lawsuit is predicated on the enforcement of non-competition clauses in
its employment agreements prohibiting the solicitation of employees to seek other employment
and prohibiting employees from soliciting TIBCO customers after their employment with TIBCO
ends. These clauses are unenforceable under California law, as they are contrary to California
law and public policy prohibiting employment agreements that restrain employees from
practicing their professions and competing against their employers.
10. TIBCO’s actions in contacting Ensuant customers has interfered with Ensuant’s
contracts and economic relationships. TIBCO is simply trying to prevent its former employees
and Ensuant from offering services to TIBCO customers, and exclude competition to secure its
market position. TIBCO’s attempt to put a cloud over Ensuant’s ability to compete violates
California’s laws against tortious interference with contract and unfair competition.
11. Cross-Complainants seek declaratory relief that TIBCO’s non-competition
provisions are invalid and unenforceable under California law. Cross-Complainants further seek
monetary damages for TIBCO’s interference with its economic relationships and contracts, and
injunctive relief preventing TIBCO from further attempting to disrupt Ensuant’s economic
relationships and contract. Cross-Complainants also seek injunctive relief preventing
TIBCO’S further attempts to enforce its illegal non-competition provisions.
GENERAL ALLEGATIONS
12. Although there was growing academic and industry interest in Complex Events
Processing (“CEP”) in the early 2000s, no company offered effective software solutions. In 2003,
Arora, then a TIBCO Principal Architect, recognized that several companies had a set of common
problems that might be solved through a CEP software solution. He approached TIBCO with his
ideas to create and market software to these and similar customers, and develop another market
for TIBCO’s enterprise software solutions. Rather than invest in the technology directly, TIBCO
asked Arora to find a customer willing to fund the proposed software. Arora procured consulting
arrangements with customers to improve their business processes, and found a customer willing
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to invest in his ideas for CEP software. Arora led a team that developed the prototype for what
became TIBCO’s successful BusinessEvents products.
13. The Arora-led TIBCO team released BusinessEvents 1.0 in November 2004,
which became an immediate leader in the field of Complex Event Processing. Every year after
2004, the Arora-led Business Events division grew, creating hundreds of millions of dollars in
revenue for TIBCO.
14. BusinessEvents’ success led, of course, to competition, as other enterprise
software and service providers entered the CEP market. CEP also grew through the development
of complementary markets in consulting services and other products.
THE COMPLEX EVENT PROCESSING SOFTWARE MARKET
15. In addition to TIBCO, established enterprise software companies such as Oracle,
IBM, SAP, Sybase, and other independent software vendors (“ISVs”) now provide CEP products
that directly compete with TIBCO’s BusinessEvents software. TIBCO retains a dominant market
share, claiming to have a 40% share of the market, over twice the nearest competitor.