Nutanix Lawsuit: 'Shocking' Behavior by Ex-Employees Now at Tessell

A Nutanix lawsuit alleges Tessell stole intellectual property (IP) and source code related to its database service offering.

Nutanix filed its lawsuit in the U.S. District Court in San Jose. It alleges Tessell engaged in willful copyright and patent infringement.

Tessell provides a DBaaS platform for startups and established enterprises. We couldn't reach Tessell for comment on the Nutanix lawsuit.

According to the federal lawsuit, Tessell’s founders include former Nutanix employees Bala Kuchibhotla, Kamal Khanuja and Bakul Banthia. The complaint against Tessell alleges that, during their employment with Nutanix, these former employees “covertly” designed, built, demonstrated and secured financing for the future Tessell product, using Nutanix source code, servers and other resources. The complaint alleges they took Nutanix Era1 source code with them to Tessell, which used it.

The complaint further alleges they schemed to remove all Nutanix branding from their prototype, and then tried to cover their tracks by wiping their Nutanix laptops.

Nutanix is seeking the return of its stolen IP, an injunction to stop further infringement, restitution for the Nutanix resources allegedly taken by the three former employees for the founding of Tessell, and money damages in an amount to be proven. Nutanix also announced that it is commencing separate arbitration proceedings against the Tessell founders per their Nutanix employee agreements.

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Nutanix Lawsuit Addresses Former Employees’ ‘Shocking’ Behavior

“It has been shocking to learn of the behavior of these former employees during their employment, the scope of what they took from Nutanix, and the steps they took to hide their use of Nutanix resources to found their company,” said Tyler Wall, Nutanix’s chief legal officer. “Nutanix believes strongly in fair competition, and its importance and value to the industry overall, and it is with deliberate and thoughtful consideration that we have decided to file this lawsuit. The facts that our investigation uncovered were egregious. We look forward to presenting our evidence and proving our claims in the litigation.”

Nutanix's Tyler Wall

Nutanix said it believes in innovation, but “stealing IP and source code is not innovation.” Nutanix also said it does not have a history of suing companies or people.

“The facts found in this situation were too nefarious to ignore,” the company said. “Nutanix Database Service is a valued part of the company’s product portfolio, and unfettered theft of its IP and source code cannot go unaddressed.”