UTStarcom v. Starent: Decision Looming in July

Implications: The litigation between Starent and UTStarcom will take an important turn in the next four weeks, as the Court will likely definitively rule on whether UTStarcom's (admittedly vague) allegations suffice to keep the bulk of its trade secret case alive.

Analysis: UTStarcom has a mound of circumstantial evidence to support its allegation that Starent built its company by borrowing heavily from UTStarcom's prior work.  Starent, however, has forcefully argued that the circumstantial evidence -- roughly the fact that a large number of senior employees left UTStarcom and took look-alike jobs at Starent -- is not enough; Starent wants details, or wants the case dismissed.

The parties have been fighting over this issue for months now.  UTStarcom understandably explains that it simply does not have much more to say right now, because without discovery it cannot know details about who took what, when, and how.  Starent understandably responds that so vague an allegation is a fishing trip, something that would be hard for Starent to defend against and something that would open up too broad a discovery process.

My take?  This is the key fight in the entire case.  After all, if the case stays alive and moves into discovery, Starent will be under huge pressure to settle.  The reason is that this sort of case is a terrible distraction for Starent's key employees, in that they are being sued as individuals for (among other things) violating their employment contracts.  So, if the case survives this early hurdle, I would think Starent would have no choice but to come to the negotiating table with a generous hand.  A company simply cannot thrive when its employees are going home every night and talking with their spouses about whether a big case at work could cost the family its house, life savings, and so on.