Broadcom Corp v. Innovium - complaint.pdf

O'MEL VENY & MYERS LLP DARIN SNYDER (S.B. #136003)

2 [email protected] 2 Embarcadero Center, 28th Floor

3 San Francisco, CA 94111 (415) 984-8700/Fax: (415) 984-8701

4 ERIC J. AMDURSKY (S.B. #180288)

5 [email protected] SARAH STARCEVICH MILLER (S.B. #264921)

6 [email protected] 2765 Sand Hill Road

7 Menlo Park, California 94025-7019 (650) 473-2600/Fax: (650) 473-2601 Attorneys for Plaintiff

9 Broadcom Corporation

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SUPERIOR COURT OF THE STATE OF CALIFORNIA 12

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COUNTY OF SANTA CLARA

BROADCOM CORPORATION, a California Corporation,

Plaintiff,

V.

INNOVIUM, INC., a Delaware Corporation; MOHAMMAD ISSA, an individual; PUNEET AGARWAL, an individual; RAJIV KHEMAN, an individual; and DOES 1-20,

Defendants.

Case No. 1 1 5 C V 2 7 58 8 5

COMPLAINT FOR:

(1) Breach of Contract; (2) Intentional Interference with

Contract; (3) Unfair Competition in Violation of

California Business and Profession code 17200 el .req.;

(4) Breach of Fiduciary Duty; (5) Breach of Duty of Loyalty; (6) Aiding and Ahetting a Breach of the

Duty of Loyalty; (7) Misappropriation in Violation of

California Civil Code 3426 el. seq.

Demand for Jury Trial

COMPLAINT

DEMAND FOR JURY TRIAL

Plaintiff Broadcom Corporation ("Broadcom"), hy and through its counsel and in support 2 of its claims fur relief against defendants Innovium, Inc. (" lnnovium"), Mohammad Issa (" Issa"),

3 Puneet Agarwal ("Agarwal") , Rajiv Khemani ("Khemani"), and Does 1-20 (collectively, 4 "Defendants"), alleges as follows :

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INTRODUCTION

1. This case seeks to remedy an orchestrated scheme by two recently departed high-

level Broadcom employees to unfairly compete with Broadcom based on (a) ideas and a business

plan that they apparently developed and marketed while they were still employed by Broadcom;

and (b) a recent, flurried raid of numerous key employees from the switch engineering

architecture, hardware, and marketing teams (the "Switch Engineering Teams") in Broadcom's Infrastructure Networking Group ("Infrastructure Group"). Broadcom embraces competition and

is a stronger, more innovative company because of it. The two former employees, however, have

formed a new company nut. to compete fairly with Broadcom. but to use Broadcom's own

confidential information and key personnel to create unfairly competing products that are

fundamentally based on the work they did for Broadcom. These former employees' actions

breached their agreements with Broadcorn, breached their duty of loyalty to Broadcom, inte1fcrcd

with Broadcom' s agreements with other employees, and violate Califomia statutory law that

prohibits unfair competition. Unless restrained, Defendants ' wrongful conduct will deprive

Broadeorn, its shareholders, and its employees of the benefits of the research and development

that Broadcom paid them to undertake.

2. Broadcom previously employed Tssa and Agarwal each for nearly ten years. They

are highly talented engineers, entmstcd by Broadeorn with the development of its flagship

products: networking products/technologies that produce billions of dollars in total annual

revenue for Broadcom. Broadcom paid Issa and Agarwal handsomely to ensure that its

networking products were at the forefront of the field, and they were responsible for making

constant improvements to the technology over many years. Based on their detailed knowledge of

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T\C "AK i\ XTT\ C /'"\0 Tf TDV "rDT AT

1 Broadcom's market-leading networking technologies and the confidential feedback that they

2 received from Broadcom's customers under non-disclosure agreements, Issa and Agarwal

3 developed-while working for Broadcom-a detailed strategic plan for new versions of

4 Broadcom' s networking products/technologies.

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3. Instead of implementing their strategic plan at Broadcom, however, lssa and

Agarwal kept it secret from Broadcom, and they used it to solicit investments in a new company

that would create next generation networking products/technologies in competition with

Broadcom. Once they came close to securing venture capital financing, Issa and Agarwal

resigned their employment without any prior notice to Broadcom. When they did, they refused to

acknowledge their prior written agreements to protect Broadcom' s confidential information and

to not engage in any employee raiding. Three days later, they incorporated lnnovium with

defendant Khemani for the purpose of implementing the strategic plan they had created while

working at Broadcom to develop new networking products/technologies. And approximately

three weeks later, Defendants reportedly closed a Series A Financing from several major venture capital firms in the amount of reportedly many millions of dollars. Issa and Agarwal then both

changed their Linkedln profile to announce they were a Founder of a "Well-Funded Stealth

Startup."

4. By failing to disclose their strategic plan for new networking

products/technologies to Broadcom, lssa and Agarwal violated their written Confidentiality

Agreements. In exchange for a substantial compensation package that they received from

Broadcom, Issa and Agarwal had agreed to assign to Broadcom the exclusive right to all

improvements and developments they conceived during their employment-including the

improvements and developments contained in their strategic plan for creating new versions of

Broadcom's networking products/technologies. When the nature of improvements to that

technology became apparent to lssa and Agarwal during their employment with Broadcom, based

on the feedback they received from Broadcom customers and their detailed knowledge of

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Broadcom's technology, they were contractually obligated by their own promises to disclose

2 those improvements to Broadcom and to assist it in implementing them. When Issa and Agarwal

3 decided to hide those improvements from Broadcom instead, and to use them to solicit money

4 from third parties to execute a strategic plan that belonged to Broadcom, they violated their

5 contractual and fiduciary duties to Broadcom.

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5. Tluee days after resigning from Broadcom, Issa and Agarwal formed Innovium,

along with defendant Khemani, to develop what should have been the newest versions of

Broadcom's networking products/technologies. To recreate these products/technologies for their

own benefit, Agarwal and Issa immt:diately began recruiting key engineers from Broadcom.

They did not post open positions or seek to hire engineers from the general pool of engineers in

the workforce. Instead, they have engaged in an orchestrated scheme to cherry-pick precisely

those key individuals at Broadcom who, collectively with Defendants, could execute the strategic

plan Issa and Agarwal had developed while working at Broadcom for new networking

products/technology.

6. Issa and Agarwal executed this targeted raid of the key engineers working on

Broadcom's own next generation networking products/technology in a way that not only gave

them immediate access to the inside knowledge they needed, hut also inflicted maximum damage

on Broadcom. Within a five-day period, five key engineers resigned with lillie to no notice and

went to work for Issa and Agarwal, and Issa and Agarwal offered employment to at least three

other key engineers. The engineers who were recmited made clear that, because of the terms of

their offers from Issa and Agarwal, they could not give a standard two weeks' notice of their

resignations. lssa and Agarwal had insisted that they resign immediately. When one of the

engineers declined their offer of employment, they told him to tear up the offer letter they had

given him. Precisely to prevent this type of misconduct, Broadcom had agreed with Issa and

Agarwal that they would not interfere with Broadcom's hu. iness by inducing Broadcom's

employees to leave their employment for one year following their resignations. Tssa and Agarwal

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did it anyway. And, knowing the impropriety of what they were doing, lssa and Agarwal insisted

that these individuals-while they were still working for Broadcom and owed duties of loyalty to

Broadcom-sign non-disclosure agreements ("NDAs") to try to prohibit them from disclosing

Defendants' wrongful conduct to Broadcom.

7. Broadcom brings this action to remedy Iss a's and Agarwal's violations of their

Confidentiality Agreements and duty of loyalty, as well as ltmovium's and Khemani 's

inducement of those violations, and to put a stop to Defendants' attempts to develop what is in

effect the latest version of improvements of Broadcom's networking technology, which belongs

to Broadcom hy virtue of Tssa's and Agarwal's agreements with it.

THE PARTIES

8. Broadcom is a California corporation with its principal place of husiness at 5300

12 California Avenue, Irvine, California 92617. Broadcom has various offices in California,

13 including offices in Irvine, Santa Clara, San Jose, and Sunnyvale.

l4 Y. On information and belief, rnnovium is a Delaware corporation with its principal

15 place of business at 12264 Tepa Way, Los Altos Hills, California 94022.

16 10. On information and belief, Issa is, and at all times mentioned was, a resident of

17 Santa Clara County, California. lssa is a former employee of Broadcom, who worked in San

18 Jose, Califomia immediately prior to his resignation of employment.

19 11. On information and belief, Agarwal is, and at all times mentioned was, a resident

20 of Santa Clara County, Califomia. Agarwal is a forn1er employee of Broadcom, who worked in

21 San Jose, California immediately prior to his resignation of employment.

22 12. On information and belief, Khemani is, and at all Limes mentioned was, a resident

2:3 of Santa Clara County, California.

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13. Broadcom is informed and believes, and on that basis alleges, that Defendants

committed violations of their contractual obligations to Broadcom, as alleged more fully below,

within the County of Santa Clara, California.

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JURISDICTION AND VENUE

2 14. Defendants are present in, domiciled in, residents of, citizens of, doing business in,

3 and have committed the acts alleged herein in the State of California. Accordingly, this Court has

4 jurisdiction over this action pursuant to California Code of Civil Procedure section 410.10 5 15. Venue is proper in this Court pursuant to California Code of Civil Procedure

6 section 395(a) because the County of Santa Clara is where Defendants reside and where Issa' s 7 and Agarwal ' s breach of contracts described below occurred.

8 GENERAL ALLRGATIONS

9 Broadcom's Business

10 16. Broadcom was founded in 1991 and is a global innovator and leader in

11 semiconductor solutions for wired and wireless communications. Broadcom provides the

12 industry's broadest po11folio of state-of-the-art system-on-a-chip (SoC) and software solutions.

13 Its products arc found in countries around the world , from urban corporate data centers and the

1 4 cloud, to villages in some of the most isolated parts of the world.

15 17. Broadcom was founded by engineers, is managed by experienced industry leaders,

16 and is powered by the talents of a highly diverse workforce. It is one of the world's largest

17 fabless semiconductor companies, and it designs and develops its products in lahs and design

18 centers around the world.

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18. Broadcom has invested billions of dollars over the years in research and

development, developing cutting edge technology to remain an industry leader. Broadcom holds

one of the industry' s broadest portfolios of intellectual property, addressing both the wired and

wireless transmission of voice, video, data and multimedia. Tlu-oughout the years, Broadeom's

experts, products, and business practices have won numerous awards and recognition, futther

validating the company's longstanding leadership position in the semiconductor industry. From

broadband technology to cloud infrastructure to home networking to mobile and wireless

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1 infrastmcture, Broadcom solutions are raising consumer expectations and setting the industry bar

2 for design and engineering.

3 19. Broadcom develops high-end switch integrated circuits in its Infrastmcture Group,

4 including Broadcom's StrataXGS technology. The StrataXGS product line is made up of several

5 proprietary silicon switches-including Broadcom's Trident Series, Trident II Series, and

6 Tomahawk Series-and used across the industry by the largest players developing data centers,

7 cloud architecture, network backbones, and other high-performance network technologies.

8 Broadcom's StralaXGS customers include some of the biggest companies developing networking

9 devices such as Cisco, Dell, Arista, IBM, and Juniper Networks. And Broadcom's StrataXGS

10 products are highly regarded in the market. In 2013, the Electronic Products Magazine

l.l recognized Broadcom's StrataXGS Trident Tl Switch as the "Product of the Year" among

12 thousands of products representing technology advancement, performance, and innovation.

13 Broadcom is able to develop such innovations because of the substantial investment it places in

14 engineering teams and the trust il places in its personnel.

15 20. Issa and Agarwal were both tmstcd leaders of the Switch Engineering Teams in

16 the Infrastructure Group at Broadcom. The Switch Engineering Teams develop and uesign

17 market-leading networking products/technologies, including network switch teclmology, and

18 release award-winning architecture optimized to meet the bandwidth, scalability and efficiency

19 demands of modern networks. Agarwal's team (the "Switch Engineering Architecture Team")

20 was responsible for developing new features in Broadcom's networking chip and building its

21 product roadmap leading to future networking teclmologies. Agarwal directly interfaced with

22 Broadcom's customers. Using product feedback from those interactions, the Switch Engineering

23 Architecture Team would design new specifications that fit customer needs and demands, and

24 conve1t those specifications into software models. lssa and his team (the "Switch Engineering

25 Hardware Team") would then take those software models and develop silicon chips that 26

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implemented these new specifications and features to directly address the needs of Broadcom's customers.

21. Broadcom' s networking products/technologies, along with its leading-edge

software solutions, can be found in a wide array of products for home and small business, data

center, enterprise, and network service providers. Broadcom's Infrastructure Group also develops

a variety of related networking teclmologics, including controller, physical layer devices, and

processers, and many of the Systems-on-Chip products developed by the Switch Engineering

Teams include these networking teclmologies. Broadcom' s Infrastmcture Group spent many

hundreds of millions of dollars on research and development over the last twelve months alone

and the Infrastructure Group generates billions of dollars in annual revenue. Broadcom also has

more than 2,300 patents that derive from its Infrastructure Group.

22. Broadcom expends significant amounts of resources in recruiting, interviewing,

13 hiring, training, developing and managing the performance of talented employees throughout its

14 workforce, including but not limited to the employees in the Switch Engineering Teams and

15 more broadly in its Infrastructure Group. Broadcom managers and executives receive

l 6 confidential and proprietary information regarding the skills, expertise, job pelformance, work 17 projects, and compensation of other employees, especially employees in their department and/or J 8 who directly or indirectly report to them.

] 9 Broadcom Hires Issa and Agarwal; 20 lssa and Agarwal Sign Confidentiality Agreements 21 23. Agarwal was hired by Broadcom in 2004 and, as a material condition of his

22 employment, he signed Broadcom's Confidentiality and Invention Assignment Agreement (the 23 "Confidentiality Agreement") on April 8, 2004.

24 24. Issa was hired by Broadcom in 2005, and as a material condition of his

25 employment, he signed the Confidentiality Agreement on July 27, 2005. 26

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COMPLAINT

DEMANDFORJURYT~

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25. Broadcom requires every employee to execute an agreement substantially similar

to the Confidentiality Agreement executed by lssa and Agarwal and considers such agreements to

be vitally important to the protection of its business. Issa and Agarwal would not have been hired

by Broadcom without signing the Confidentiality Agreement.

26. In the Confidentiality Agreement, Tssa and Agarwal agreed to "promptly disclose

in writing" to Broadcom all "inventions," which included "developments, designs, ideas, f andl

improvements." Tssa and Agarwal agreed that all such Inventions would be " the sole property of'

Hroadcom.

27. ln the Confidentiality Agreement, Issa and Agarwal also acknowledged and agreed

10 that for a period of one year inunediately following tennination (voluntary or otherwise) of their

11 employment with Broadcom, Tssa and Agarwal "shall not interfere with the business of

12 lBroadcomj by inducing an employee lo kave [Broadcom's] employ or by inducing a consultant

13 to sever the consultant's relationship with [Broadcom]."

14 28. In the Confidentiality Agreement, Issa and Agarwal also acknowledged and agreed

15 to sign a Termination Certification upon the termination of their employment with Broadcom that

16 confirms that they will comply with their ongoing obligations to Broadcom following the

17 tem1inalion of their employment with the company.

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29. Issa and Agarwal occupied senior positions of trust at Broadcom, in which they

were exposed to sensitive, non-public business, pers01mel, and technical information. By virtue

of their interaction with Broadcom customers, they had access to confidential, proprietary

information regarding Broadcom's customer needs-information that was disclosed by customers

under the terms of NDAs that the customers had with Broadcom.

30. lssa was a Vice President of Engineering in the Infrastmcture Group. In this high-

level executive position, he earned a substantial six-figure salary and received large bonuses and

equity awards. As Vice President of Engineering, Issa led a team of over 200 engineers

(including the Switch Engineering Teams), and was responsible for developing and designing

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Broadcom's network silicon chips-from design methodology to integrated circuit design to post-

silicon validation and production- based on the design specifications and software models

Agarwal's team created. Accordingly, he had access to highly sensitive, confidential and

proprietary information regarding Broadcom's network switch chip technology, including

Broadcom' s next generation chips. And, given the size of his team, his management

responsibilities, and collaboration with other teams, Issa was privy to the skills, specialized

experience, and interests of numerous key members of not only Broadcom' s Swit\:h Engineering

Teams, but also the Infrastructure Group more broadly. lssa has been issued five patents and he

has two pending patent applications.

31. Agarwal received numerous promotions during his tenure at Broadcom, and at the

time of his resignation, was a Senior Technical Director for the Switch Engineering Architecture

Team in the Infrastructure Group, earning a substantial six-figure salary and receiving large

bonuses and e4uity awards, and had been approved to be promoted to Vice President,

Technology. As a Senior Technical Director, Agarwal was the key architect for Broadcom's

flagship net working technology portfolio and led the team responsible for developing the

product/technology roadmap. Agarwal directly interfaced with Broadcom's customers, ami he

knew what their needs were, what was working and what was not, and what technology

improvements they were demanding. Significantly, this feedback was Brnaucum's confidential

infom1ation pursuant to NDAs that Broaucom enters into with its customers. With that product

feedback, the Switch Engineering Architecture Team and he would design new specifications that

fit the customer needs and demands and convert those specifications into software models. Issa

and the Switch Engineering Hardware Team would then take those software models (composed primarily of software code) and specifications and develop silicon chips, i.e., integrated circuits, that implemented the customer's desired design features. Agarwal essentially had full access and

visibility to Broadcom's customers, as well as to the customers' technological requirements and

product feedback. He also had unfettered access to Broadcom' s key networking technologies and

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1 intellectual property, including Broadcom' s research and development. next generation

2 networking technologies, and undisclosed business and strategic considerations for the entire

3 Infrastructure Group. Agarwal similarly had significant information regarding, and familiarity

4 with, the skills, experience and contributions of key members of the Infrasttucture Group, and

5 more specifically, the Switch Engineering Teams. Agarwal has been issued forty-three patents

6 and has forty-one pending patent applications.

7 lssa and Agarwal Use Confidential Broadcom Information To Secretly Solicit

8 Venture Capital Funding While Still Employed By Broadcom

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32. On information and belief, Khemani is a Silicon Valley executive with broad

experience in both venture capital and semiconductor technology. From 2003 to 2013, Khemani

was employed by Cavium, a company that also develops network switch integrated circuits.

Before leaving Cavium, Khemani held executive roles including Vice President and General

Manager leading sales, engineering, operations, and marketing, and he was responsible for

strategic planning, product roadmaps, and customer development while leading his departments at

Cavium. After Caviurn, Khemani served as Board Chairman at Kaazing Corporation, a web-

communications company, and co-founded Moment Ventures, an early stage venture capital fund

focused on enterprise software. 33. On information and belief, in the latter half of 2014-while Tssa and /\gruwal were

still employed at Broadcom-lssa, Agatwal, and Khemani began to seck out venture capital

funding from numerous venture capital firms. On information and belief, they pit(;hed one or

more next generation networking products/technologies that, perhaps unbeknownst to their

potential investors, were based upon the confidential information Tssa and Agarwal had learned

and had access to during their tenure at Broadcom. On infom1ation and belief, Defendants told

potential investors that they knew the strengths of and potential areas of improvement for

Broadcom' s products, had leamed from Broadcom' s mistakes and successes, and could use that

infonnatiun to make an even better product on their own.

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1 34. On information and belief, Khemani knew that lssa and Agarwal were employed

2 by Broadcom during this time period and that they had access to confidential and proprietary

3 Broadcom information regarding networking products/technologies that was relevant to the

4 concept he helped pitch to the venture capital firms.

5 Issa and Agarwal Abruptly Resign from Broadcom

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35. On December 8, 2014, lssa and Agarwal both resigned from Broadcom, without

any advance warning or notice. They said they did not have other jobs, but were considering a few "things," and Issa said he had a technology "idea" that he wanted to pursue and planned to

speak with Broadcom's Executive Vice President and General Manager of the Infrastructure

Group about it in the coming weeks.

36. When they resigned, Broadcom requested that they both sign the company's

standard form Tennination Certification (which all depatting employees are asked to do in

accordance with their Confidentiality Agreements), confinning that they had returned all

Broadcom confidential information and property, that they had reported to Broadcom all

inventions they conceived that were covered by the Confidentiality Agreement, that they would

not disclose or use any Broadcom confidential information, and that they had complied with and

would continue to comply with the terms of the Confidentiality Agreement, including but not

limited to the obligation not to intedere with Broadcom's business by inducing employees to

leave Broaclcom's employ for a period of one year following their resignation date. Both Issa and

Agarwal, however, refused to sign the Termination Certification. They claimed they wanted to

first review the Termination Certification with legal counsel. But it has been over a month since

their resignation-more than ample time to obtain legal review of a standard, one page

document-and Tssa and Agarwal have yet to provide Broadcom with the signed Termination

Certification or otherwise confirm their agreement to its contents.

Defendants Immediately Launch New Company and Begin Inducing Broadcom

Employees to Join Them

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37. Despite the fac t that Issa and Agarwal only resigned from Broadcom last month,

on information and belief, Issa. Agarwal, and Khemani have already launched a new technology

company called Innovium, obtained significant venture capital funding, hired numerous

employees, and set up office space and active business operations.

38. Innovium was incorporated on December 11 , 2014-a mere three days after Issa

and Agarwal resigned from Broadcom. On infonnation and belief, K.hemani, Issa, and Agarwal

co-founded Innovium, and Khemani serves as its CEO.

39. Within weeks of their resignation from Hroadcom, and in direct violation of the

Confidentiality Agreement, Issa and Agarwal began a targeted strategy to induce Broadcom

employees from the Switch Engineering Teams to leave Broadcom and join Innovium. By virtue of their high-level positions with Broadcom, Issa and Agarwal had inside knowledge as to the

specific skills and experiences of the Broadcom employees they would need for their new

venture, as well as the compensation information of Broadcom employees, which funher assisted

Issa and Agarwal to selectively target specific Broadcom employees for solicitation. As of the

date of this Complaint, Defendants have induced at least five Broadcom employees to resign from

Broadcom, made an offer of employment to at least three others, and have indicated that many

more Switch Engineering Team employees may be leaving Broadcom in the near future.

40. After one targeted employee declined their job offer on or about January 12, 2015, Defendants engaged in a 11urricd raid on the Switch Engineering Teams. Over the next four days,

five employees informed Broadcom that they wanted to resign as soon as possible-if not that

very same day-providing little or no notice or warning and all following a similar script. They

made clear that they would not provide an industry-standard notice period of two weeks to assist

with the transition of their duties, and that their depmtures would take effect inm1ediatcly.

Indeed, the immediacy of their deprutures was so important that they quit just three weeks shy of an equity vesting date on February 5, 2015, and a payment of annual bonuses in late February

2015, thereby leaving a significant amount of money on the table (and in one case, even

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DEMAND FOR JURY TR1AL

triggering an obligation to repay a ignificant signing bonus). The message they conveyed to

2 Broadcom was clear- Defendants had not only offered them employment, but also had insisted

3 on a coordinated and immediate departure designed to cause immediate harm to the Switch

4 Engineering Teams while simultaneously re-creating the same technical team that existed at

5 Broadeom but for Defendants' own benefit to unfairly compete with Broadcom. 6 41. On January 12, 2014, Rupa Budhia ("Budhia")-Associate Technical Director for

7 the Switch Engineering Architecture Team-notified Broadcom that after almost ten years at the

8 company, she was resigning, and wanted to leave that very same day. Budhia had worked

9 directly under Agarwal prior to his December 8, 2014, departure. After Agatwalleft Broadcom

10 in December, Budhia assumed a part of Agarwal's leadership role as a key architect for network

11 switch technology. After mmouncing her resignation, Budhia initially explained to Broadcom

12 that she had been happy at Broadcom and was not looking for a new job, but that the new 13 opp011unity to work for Defendants came up and it was one that she could not pass up. Budhia

14 has informed Broadcom that in her new position at Defendants' company, she will continue to

15 perform architecture work and work on similar tcclmology to the networking technology that she

16 worked on at Broadcom. Budhia has been issued one patent and has four pending patent

17 applications.

18 42_ On January 12, 2015, Michael Filardo ("Filardo")-Senior Principal Engineer, IC

19 Design for the Switch Engineering Hardware Team-said he was resigning from Broadcom, with

20 just five Jays' notice. At Broadcom, Filardo was responsible for the logic design, chip 21 integration and chip design methodology, and he worked on the chip integration team responsible

22 for next generation networking products in Broadcom's portfolio. Filardo has confirmed that he

23 is going to work for Defendants, starting Monday, January 19,2015, and informed Broadcom that

24 he had also signed a non-disclosure agreement with them.

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43. On January 13, 2015, Meg Lin ("Lin")-Associate Product Line Director for

Marketing for the Switch Marketing Team-also gave notice that she was resigning from

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Broadcom, effective immediate! . Lin informed Broadcom that she had accepted a position

2 working for Defendants and was on Defendants ' payroll effective January 14, 2015. During her

3 tenure at Broadcom, Lin worked closely with the Switch Engineering Teams and was once a

4 member of the Switch Engineering Architecture Team. She has a strong understanding of

5 Broadcom' s network switch architecture. and at the time of her departure, was driving the

6 requirements for Broadcom' s next generation networking chips. Lin has been issued three

7 patents and she has three pending patent applications.

8 44. On January 13, 2015, Avinash Mani ("Mani")-Senior Director, IC Design 9 Engineering for the Switch Engineering Hardware Team-informed Broadcom that he was

10 resigning his employment in order to accept a position working for Defendants. He insisted on

11 leaving Broadcom the very next day. Mani told Broadcom that he had only learned about the

12 new position with Defendants the day before, and had to make a decision within 24 hours and

13 agree to start Monday, January 19,2015 , or else the offer would expire. Mani spent eight years at

14 Broadcom, and worked directly for lssa immediately before Issa' s departure. His responsibilities

15 included managing a team of over fifty engineers (including those at the director and senior 16 manager level), and he was responsible for providing technical direction and validation of l7 Broadcom' s networking chips, including design verification, emulation, silicon validation and

18 device driver development for all of Broadcom' s networking chips developed in its San Jose

l 9 design center.

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45. On January 16,2015, Bruce Kwan ("Kwan")-a Technical Director and Distinguished Engineer for the Switch Engineering Architecture Team-sent a goodbye email to

some of his Broadcom co-workers and never returned to Broadcom's premises. He never

formally resigned and did not participate in Broadcom's standard exit procedures. In fact, Kwan

did not answer his phone when his manager called him to discuss his departure, nor did he answer

the door when his manager went to his house to try to speak with him. Broadcom's efforts to

communicate with him have gone unanswered. Kwan had been at Broadcom for eleven years and

- 15 -COMPLAINT


prior to Agarwal's departure, Agarwal had been K wan's manager for more than a year. K wan

2 was responsible for leading the architecture and microarchitecture team for the networking

3 product line. He has been issued thirty-seven patents and he has twenty-nine pending patent

4 applications.

5 46. On information and belief, Defendants have solicited other current employees of

6 Broadcom to become involved with, work for, or perform other services for Innovium, including

7 but not limited to two Senior Managers, IC Design Engineering for the Switch Engineering

8 Hardware Team and an Associate Technical Director for the Switch Engineering Hardware Team.

9 47. On January 8, 2015, a Senior Manager for the Switch Engineering Hardware Team

10 infomted Broadcom that he had been offered a position working for Defendants. He has worked

11 at Broadcom since 2002, and he worked under Is sa's management for almost nine years. He is

12 responsible for leading the development of Broadcom' s key networking product lines, including

13 next generation chips from definition to production, and he manages a group of engineers within

14 the Switch Engineering Hardware Team.

15 48. On January 12,2015, an Associate Technical Director for the Switch Engineering

16 Hardware Team informed Broadcom that he was resigning his employment and accepting a

17 position working for Defendants. He told Broadcom that he had signed a non-disclosure

18 agreemenl with Defendants and that he therefore could not provide any more information to

19 Broadcom other than that he was resigning. On January 15,2015, he decided to remain at

20 Broadcom and declined Defendants' offer. He is an important member of Broadcorn's Switch

21 Engineering Hardware Team, had worked under Issa, who considered him a top performer and

22 lssa was very familiar with his skills, knowledge, and capabilities. He is a key microarchitect for

23 networking chip products .

24 49. On January 14, 2015, another Senior Manager for the Switch Engineering

25 Hardware Team infom1ed Broadcom that he too had been offered a position by Defendants and

26 that he therefore wanted to discuss his future with Broadcom in order to evaluate Defendants'

27 - 16-

28 COMPLAINT

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offer. At Broadcom, he manage a team of design engineers who support networking chips

developed in Broadcom's San Jose location. He ultimately decided not to accept Defendants' job offer. When he spoke with Iss a on January 14, 2015 to inform him of his decision to remain at

Broadcom, lssa responded that he should be aware that there are others on his team that will be

joining Defendants-thus confirming Defendants ' strategic targeting and raiding of Broadcom's key employees who were developing Broadcom' s next generation networking

products/technologies as pmt of the Switch Engineering Teams. Issa also instmcted him that he

should destroy his offer letter with lnnovium, making clear his desire to keep Broadcom from

reviewing it

50. As a result of their targeted raid, Defendants have solicited some of the most

ll talented employees on the Switch Engineering Teams through the use of Broadcom's confidential

1 2 and proprietary infonnation regarding the skills, experience and performance of employees who

13 fit their exact needs on virtually no notice and apparently without having to go through the

1.4 significant burden and expense of job posting, vetting applicants, conducting interviews and 15 recmiting applicants in a highly competitive job market. In so doing, Defendants have largely 16 raided key employees from Broadcom's Switch Engineering Teams for their ''well-funded stealth

l7 startup" (as Issa described the venture in his Linkcdln profile), for their own henefit, at the same

18 time that they have disrupted Broadcom's own operations. Within the Switch Engineering

l9 Teams, they strategically solicited those with the various different skills necessary to, when

20 combined, establish an entire switch design team capable of designing the very products

.21 Broadcom develops and sells lo its customers.

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51. On information and belief, Ddendants' unlawful solicitation and inducement of

these individuals is pmt of a systematic raid of key employees from Broadcom' s Switch

Engineering Teams in order to huild out Defendants' own networking design engineering team

for its "well-funded stealth sta1t-up" while simultaneously damaging the operations of

Broadcum's Switch Engineering Teams.

- 17 -COMPLAINT

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52.

FIRST CAUSE OF ACTION

(Breach of Contract) (Against Tssa and Agarwal)

Rroadcom realleges and incorporates herein by reference each and every allegation

contained in paragraphs 1 through 51, inclusive, hereinabove.

53. As a material condition to their employment with Broadcom, Issa and Agarwal

entered into written contracts in which they agreed to "promptly disclose in writing, to

fBroadcoml, all discoveries, developments, designs, ideas, improvements, inventions, formulas,

programs, devices, processes, techniques, know-how, data and original materials (whether or not patentable or registerable, under copyright or similar statutes) made, conceived, reduced to practice, or learned by lthemj (either alone or jointly with others) during the period of ftheirj employment, that are related to or useful in the business of [Broadcom]. or which result from tasks assigned to [themJ by lBroadcoml, or from the usc of premises owned, leased, or otherwise

acquired by [Broadcom]. (all of the foregoing are referred to in this Agreement as 'Inventions ' )."

54. As a material condition to their employment with Broadcom, lssa and Agarwal

16 entered into written contracts in which they agreed not to "interfere with the business of

l7 [Broadcoml by inducing an employee to leave [Broadcom's] employ" for one year following

LH termination of Issa's and Agarwal's employment.

l9 55. Notwithstanding Issa's and Agarwal's agreement to these terms, Defendants failed

20 to disclose in writing to Broaclcom their strategic plans for improvements on Broadcom's

21 networking products/tet.:hnologics, and they have induced one or more Broadcom employees to

22 terminate employment with Brua

1 covenants, and promises that have been excused by reason of Agarwal's and Issa's breaches 2 alleged herein.

3 58. As a direct and proximate result of Issa' s and Agarwal 's material breaches of their

4 agreements with Broadcom, Broadcom has been damaged in a sum according to proof at the time 5 of trial.

6 59. Unless and until Defendants are restrained from the actions described herein,

7 Broadcom will continue to suffer great and irreparable harm for which money damages would be

8 an inadequate remedy. Broadcom is therefore entitled to injunctive relief compelling Issa and 9 Agarwal to disclose in writing and assign to Broadcom all Inventions (including the strategic plan

I 0 lhey crealcd for improving on Broadcom's networking technology), restraining lssa and Agarwal 11 from using those Inventions for their own hencfit, and restraining Issa and Agarwal from

l_2 soliciting and/or inducing Broadcom's employees to terminate their employment with Broadcom

I_ 3 for a period of one year.

14 SECOND CAUSE OF ACTION

1.5 (Intentional Interference with Contractual Relations) 16 (Against lnnoviurn and Khemani) ]_7 60. Broadcom reallegcs and incorporates herein by reference each and every allegation 1.8 contained in paragraphs 1 through 59, inclusive, hereinabove.

19 61. The Confidentiality Agreements are valid, existing, and binding contracts between

20 Broadcom and Issa and Broadcom and Agarwal, whereby hoth lssa and Agarwal agreed to

21 disclose and assign to Broadcom all Inventions, not to use Broadcom's Inventions for their own

22 hcncfit, and not to inte1fere with Broadcom's business by inducing Broadcom employees to

23 terminate their employment for a one-year period following lssa' s and Agarwal's departure from

24 Broadcom.

62. lnnovium and Khemani have knowledge of the Confidentiality Agreements 25 26

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between Broadcom and Issa and Agarwal, and the contractual obligations contained therein .

- 19-COMPLAINT

1 63. On information and belief, Innovium and Khemani are intentionally and willfully 2 causing Issa and Agarwal to breach their obligation not to solicit Broadcom employees and thus

3 interfering with Confidentiality Agreements and dismpting the contractual relationship between

4 Broadcom and Issa and Agarwal.

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70. Unless and until Defendants' are restrained from the actions described herein,

2 Broadcom will continue to suffer great and irreparable harm for which money damages would be

3 an inadequate remedy. Broadcom is therefore entitled to injunctive relief against Defendants. 4 FOURTH CAUSE OF ACTION

5 (Breach of Fiduciary Duty) 6 (Against Issa) 7 71. Broadcom realleges and incorporates herein by reference each and every allegation

8 contained in paragraphs 1 through 70, inclusive, hereinabove.

9 72. By virtue of his position as a Vice President of Broadcom, lssa owed Broadcom a I 0 fiduciary duty.

11 73. lssa's fiduciary duties to Broadcom precluded Issa from usurping corporate

12 opportunities of Broadcom for his own personal benefit, from actively exploiting his position

l3 within Broadcom for his own personal benefit, and from hindering the ability of Broadcom to

14 continue the business for which it was fom1ed.

15 74. In violation of his fiduciary duty to Hroadcom, Iss a took actions while he was still

16 employed by Broadcom to dive1t business away from Broadcom to a new entity he would later

17 create. On information and belief, during his employment with Broadcom, lssa developed ideas

:tH and a business plan to improve Broadcom's networking products/technologies without disclosing

l9 such ideas and business phm to Broadcom and, instead, he marketed such ideas and business plan

:w to obtain many millions of dollars in venture capital financing for a competing company that

21 would exploit those strategic plans for Issa's own personal benefit.

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75. As a direct and proximate result of Issa's breach of fiduciary duty, Broadcom has

suffered damages, and is entitleJ to recover such damages, in an amount to he proven at trial.

Broadcom's damages for breach of fiduciary duty include, but arc not limited to, all

compensation paid by Broadcom to lssa during the period of time in which he was in breach of

his t"iduciary duty pursuant to the faithless servant doctrine.

- 21 -COl\1PLAINT

1 76. Because Issa' s breach of fiduciary duty was willful and malicious, Broadcom is

2 also entitled to an award of punitive damages against Issa.

3 FIFTH CAUSE OF ACTION

4 (Breach of Duty of Loyalty) 5 (Against Agarwal and lssa) 6 77 . Broadcom realleges and incorporates herein by reference each and every allegation


8 78. By virtue of their employment with Broadcom, Issa and Agarwal owed a duty of

9 loyalty to Broadcom.

lO 79. In violation of their duty of loyalty to Broadcom, lssa and Agarwal took actions

11 while they were still employed by Broadcom to divert business away from Broadcom to a new

12 entity they would later create. On information and belief, Issa and Agarwal failed to disclose

l3 their strategic plans for improving Broadcom's networking technology in violation of their

14 Confidentiality Agreements and, moreover, actively concealed both those strategic plans and their

15 efforts to solicit many millions of dollars from venture capital firms to form a competing

16 company that would exploit those strategic plans for their own personal benefit.

17 80. Issa and Agarwal willfully and intentionally failed to discharge their duties and

lH responsibilities as Broadcom employees.

l9 81. As a direct and proximate result of the wrongful conduct or Tssa and Agarwal,

:~0 Broadcom has suffered damages, and is entitled to recover such damages, in an amount to be 21 proven at trial. Broadcom's damages for breach of the duty of loyalty include, hut arc not limited

22 to, all compensation paid by Broadcom to lssa and Agarwal during the period of time in which

23 they were in breach of their duty of loyalty pursuant to the faithless servant doctrine.

24 lQ. Because the actions of Issa and Agarwal were both willful and malicious,

25 Broadcom is also entitled to an award of punitive damages against lssa and Agarwal. 26

''7 "

- 22-28 COtvll'Li\INT


1 SIXTH CAUSE OF ACTION

2 (Aiding and Abetting a Breach of Duty of Loyalty) 3 (Against Khemani)

4 83. Broadcom realleges and incorporates herein by reference each and every allegation


6 84. On information and belief, Khemani knew that Issa and Agarwal were employees

7 holding senior positions at Broadcom in 2014, until their resignation on December 8, 2014. On

8 information and belief, Khcmani also knew that by virtue of their employment with Broadcom,

9 Agarwal and lssa owed duties of loyalty to Broadcom. 10

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85. On infonnation and belief, Khcmani knew that Issa and Agarwal were violating

their duties of loyalty to Broadcom by taking actions while they were still employed by

Broadcom to divert business away from Broadcom to a new entity they would later create. On

information and belief, Khemani also knew that lssa and Agarwal were violating their duties of

loyalty to Broadcom hy failing to disclose their strategic plans for improving Broadcom's

nt!tworking technology in violation of their Confidentiality Agreements and actively concealing

both those strategic plans and their efforts to solicit many millions of dollars from venture capital

firms to form a competing company that would exploit those strategic plans.

g6. On information and belief, Khcmani provided substantial assistance and/or

cncouragemenl to Agarwal and lssa in breaching their duties of loyalty to Broadcom.

R7. On information and belief, Khemani ' s conduct was a substantial factor in causing

21 harm to Broadcom, which suffered damages as a direct and proximate cause of the breaches.

22 Broadcom is entitled to recover damages in an amount to be proven at trial.

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88. Because the actions of Khernami was both willful and malicious, Broadcom is also

entitled to an award of punitive damages against Khemani .

SEVENTH CAUSE OF ACTION

(Misappropriation In Violation of California Civil Code 3426 et seq.)

- 23 -COMPLAINT


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(Against all Defendants) 89. Broadcom realleges each and every allegation set forth in paragraphs 1 through 88,

inclusive, and incorporates them herein by reference.

90. Broadcom' s trade secret and confidential, proprietary materials include documents

and infom1ation that derive independent economic value from not being generally known to the

public or to other persons who can obtain economic value from their disclosure or use, including

but not limited to customer information. These materials include, but are not limited to,

information regarding Broadcom's networking product architecture, information regarding

Broadcom's networking product hardware, information regarding feedback from Broadcom

customers regarding its networking products, and information regarding Broadc..:om persmmel

with specific expertise and inside knowledge regarding Broadcom's networking

technology. These documents and information constitute "trade secrets" under Califomia Civil

Code Section 3426.1.

91. These materials and information are the subject of reasonable efforts by Broadcom to maintain their secrecy. Among other things , Broadcom limits physical access to its premises

through the use of individually-issued and monitored security badges for authorized personnel

and the employment or a sizable security force. Broadcom employs cutting-edge technological

security measures that indude not only the use of individually-issued passwords to access

Broadcom computers, as well as the usc of firewalls, encryption, and anli-virus software, but also

proprietary systems designed to limit, monitor, and record activity on Broadcom's computer

systems. Broadcom also requires all employees to sign confidentiality and invention assigrunent

agreements that prohibit the unauthorized usc or disclosure of Broadcorn's trade secrets and has

various policies in effect that provide similar protections lo Broadcom. Rroadcom also protccls

its trade secrets by entering into non-disclosure agreements with its customers and vendors.

92. In violation of California's Uniform Trade Secrets Act, Defendants willfully and

maliciously misappropriated Broadcom's trade secrets through improper means. Among other

- 24-COMPLAINT

DEMAND FOR TIJRY TRIAL

1 things, on information and belief, Agarwal and Issa used their detailed knowledge as key leads of

2 Broadcom's Switch Engineering Architecture Team and Broadcom's Switch Engineering

3 Hardware Team to identify specific areas for improvement upon Broadcom's existing networking

4 technologies, to identify specific engineering solutions for implementing those improvements,

5 and to identify specific Broadcom personnel with the inside knowledge necessary to accomplish

6 those engineering solutions. Instead of reporting these matters to Broadcom, on information and

7 belief, Issa and Agarwal used this knowledge in order to solicit funding to create a new company

8 that would exploit this knowledge for its own benefit. Defendants have used this knowledge to

9 successfully induce key engineers to leave Broadcom's Switch Engineering Teams to join 10 Innovium and, on information and belief, are using the trade secret knowledge of those

11 individuals to build upon Broadcom's networking technologies in the creation of products on

12 behalf of lnnovium.

13 93. By reason of the above-alleged acts and conduct of Defendants, Broadcom has

14 been damaged, and it will suffer great and irreparable han11 and damage. The amount of this

15 irreparable harm will be difficult to ascertain, and Broadcom will be without an adequate remedy

16 at law.

17 94. Broadcom is entitled to injunctive relief restraining Defendants, their officers, 18 agents, employees, and all persons acting in concert with them, from using or disclosing

19 Broadcom's trade secrets and restraining Defendants from obtaining any benefits from their

20 wrongful use of Broadcom's trade secrets.

21 95. Broadcom is further entitled to an order requiring Defendants, their employers,

22 agents, employees, and all persons acting in concert with them, to return to Broadcom any and all

23 of its trade secrets and confidential, proprietary materials , including but not limited to any and all

24 materials consisting of, incorporating, referencing, or derived from Broadcom's trade secrets and

:25 confidential, proprietary information.

26 96. Broadcom is further entitled to recover from Defendants for the actual damages

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')8 -

COMPLAINT

DEMJ\ND FOR JURY TRIAL

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sustained by Broadcom as a result of Defendants' wrongful acts described in this Complaint. The

amount of such damages cannot be determined precisely at this time. Defendants' acts of

misappropriation were both willful and malicious, and Broadcom is entitled to an award of

punitive damages and attorney fees against Defendants. Broadcom is further entitled to recover

from Defendants the gains, profits, advantages, and unjust enrichment that they have obtained as a result of their wrongful acts as described herein. Broadcom is at present unable to ascertain the

full extent of these gains, profits , advantages and unjust enrichment.

WHEREFORE, Broadcom prays for judgment against Defendants as follows: 1. Injunctive relief restraining and enjoining Defendants from continuing the

wrongful acts and conduct set forth above;

2. An order compelling Defendants to comply with their continuing obligations as set

12 forth above;

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Compensatory damages in an amount to be proven at trial;

Repayment of all compensation received by Issa and Agarwal from Broadcom L5

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during the period of time when they were in breach of their fiduciary duties and/or duty of loyalty

pursuant to the faithless servant doctrine:

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5. Punitive and/or statutory exemplary damages;

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Reasonable attorneys' fees;

All costs of suit herein incutTecl; and

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28 COMPLArNT


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Such other and further relief as the court may deem proper.

2 Broadcom hereby demands a trial by jury.

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Dated: January 20, 2015

DARIN SNYDER ERIC J. AMDURSKY SARAH STARCEVICH MILLER O'MELVENY & MYERS LLP

By: Eric J.

Attorneys for Plaintiff Broaclcom Corporation

-27-COMPLA1NT

DEMAND Fn~ nrov'T'orAr

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Broadcom Corp v. Innovium - complaint.pdf

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