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Omniture co-founder and former CEO Josh James said Monday a lawsuit filed against him by Adobe Systems Inc. is retaliation for his suit against the California company a tit-for-tat action aimed at interfering with the software business he has purchased.
The lawsuits bring into the open the contentious state of James and Adobe's relationship since he left software giant Adobe in July, nine months after it bought Omniture in a $1.8 billion deal. The tensions erupted over James' recent purchase of Corda Technologies Inc. of Lindon, which Adobe claims is a competitor that is trying to lure away Adobe employees.
On Friday, San Jose, Calif.-based Adobe asked a federal judge in Utah to require James to honor agreements that he refrain from competing with it and from recruiting its employees. The lawsuit contends that software provider Corda offers competing products and that James made a written offer to an Adobe employee to work for him at Corda, where he is CEO.
"This lawsuit is a reaction to one I filed in San Jose [Calif.]last week about the fact that Adobe is unlawfully seeking to interfere with my work at Corda," James said in an e-mail Monday. "Corda does not compete with Adobe, and, in fact, Adobe buys our products."
The lawsuit filed by James and Corda in the Superior Court in Santa Clara County in California contends that Adobe has been attempting to unlawfully enforce the noncompete clause in agreements signed when he became an executive vice president of Adobe after the Omniture deal. It contends that parts of those agreements violate California law and can't be enforced.
In an interview Monday, James said he is puzzled by Adobe's lawsuit, claiming he had informed CEO Shantanu Narayen, board members and other management members of his interest in developing products such as those Corda offers and heard no objections.
"I think there's someone with an ax to grind" at Adobe, James said, "because they don't like free enterprise. They don't like entrepreneurs."
An Adobe representative declined comment on either lawsuit.
Corda's main product a computer screen dashboard that assembles information from various sources within a company and provides it in graphic form does not compete with Adobe, he said. A product called Highwire is competitive but is a tiny fraction of the company's business (tens of thousands of dollars) and is not part of his strategic vision for Corda, James said.
James became executive vice president and general manager of the Omniture business unit under Adobe but left in July. He bought Corda sometime in October and became CEO, but the company did not disclose the deal because it plans to announce a name and strategy change in January or February, James said.
James received about $80 million for the sale of his shares when Adobe purchased Omniture, which sells software that measures and analyzes website traffic. In addition, as an officer of Adobe he was paid an annual base salary of $480,000, was eligible to participate in a bonus plan that would pay an additional $360,000 a year, plus given stock options and awards, according to the Adobe lawsuit.
When he left Adobe, James was given "a very substantial one-time severance payment" and other benefits. "In exchange for these separation benefits, James expressly agreed to continue to abide by the terms of the proprietary rights and noncompetition agreements," the suit says.
Adobe alleges that Corda's Highwire is described on Corda's website as "a great alternative to Adobe Converter PDF."
Last month, according to the Adobe suit, James encouraged a key Adobe employee, who was not named, to leave Adobe and join Corda, even sending him a written offer of employment. The employee ended up staying with Adobe after receiving a raise and other benefits.
"The allegations in Adobe's complaint are false," James said. "I have always taken extraordinary care to ensure compliance with all my contracts with Adobe, and I never encouraged anyone to leave Adobe. In fact, I have convinced dozens of unhappy Adobe people to stay."
He said the employee approached him about leaving Adobe and was required to sign a statement to that effect before James would talk to him, James said, contending he also informed Adobe about being approached.
Adobe is seeking injunctions against James to restrain him from violating his agreements. It also is seeking unspecified monetary damages and attorney fees. James is seeking damages and a court declaration that the Adobe noncompete and nonsolicitation agreements are not enforceable under California law and that Corda does not compete with Adobe.
Josh James statement
"The allegations in Adobe's complaint are false. I have always taken extraordinary care to ensure compliance with all my contracts with Adobe, and I never encouraged anyone to leave Adobe. In fact, I have convinced dozens of unhappy Adobe people to stay.
"This lawsuit is a reaction to one I filed in San Jose [Calif.] last week about the fact that Adobe is unlawfully seeking to interfere with my work at Corda. Corda does not compete with Adobe, and, in fact, Adobe buys our products. I am focused on building a business and this business is one in which Adobe has no involvement.
"I was proud to build Omniture, which is a shining star within Adobe's overall business, and I want to assist in its continued success, even though I have left the company, in part because I am a substantial shareholder in Adobe. I am confused and disappointed about why Adobe would take this action and can only conclude that someone in Adobe's corporate management has a personal ax to grind."
Corda Technologies Inc.
Founded • 1996
Location • Lindon
Employees • About 100
Business • A software "dashboard" to give real-time information from company databases
Sale • Bought by former Omniture CEO and co-founder Josh James in October
O To see the Josh James lawsuit against Adobe and an accompanying letter, go to http://bit.ly/fuRS4p
To see the Adobe lawsuit against James, go to http://bit.ly/fjK0Gm