Last month Microsoft announced the acquisition of data warehousing appliance vendor DATAllegro, but now there is a fly in the ointment in the form of a patent suit charging that DATAllegro’s key technology was "borrowed" by DATAllegro CEO Stuart Frost from a company called XPrime where he was previously CEO and where it was patented:
The complaint (PDF, 35 pages) was filed in U.S. District Court in San Diego by Cary Jardin, the founder of XPrime, who was issued a patent in February 2007 for a "System and Method for Generating and Processing Results Data in a Distributed System." Jardin had filed for the patent at the time Frost worked at XPrime, according to the suit.
The suit alleges that the "unauthorized use of Jardin’s intellectual property continues to this day."
With the acquisition still pending, Microsoft isn’t named as a defendant in the suit. The Redmond company referred questions to DATAllegro, based in Aliso Viejo, Calif. DATAllegro didn’t respond to requests for comment Wednesday afternoon.
This isn’t necessarily a deal killer, but you can be sure that the Microsoft lawyers are all over this one inserting insurance clauses in the final acquisition agreement.