EMC Sues Startup

In the lawsuit, filed Wednesday, EMC alleges that the two former employees left to start a rival consulting company that quickly ramped up its business by “unfairly and illegally” using proprietary and confidential information they took from EMC.

According to the lawsuit filed with the U.S. District Court for the District of Massachusetts, a copy of which was reviewed by ChannelWeb, EMC Wednesday sued Knowledgent Group, a New York-based consultant, along with Emanuel Arturi and Francis Casagrande.

EMC said in the lawsuit that Knowledgent was founded by Arturi and Casagrande. A check of Knowledgent's Web site does not disclose the names of the company's executives or management team.

The court document can be read by clicking here.

According to EMC, Arturi and Casagrande were two of the four principals of BusinessEdge Solutions, which EMC acquired in August 2007 for more than $200 million. The two men each received more than $50 million as a result of the acquisition, EMC said.

After the acquisition, EMC hired BusinessEdge’s founders and employees, including Arturi and Casagrande. Arturi and Casagrande left EMC in December 2007. EMC alleges that they launched Knowledgent in or around October 2009. A check of the company's Web site does not disclose the month the company was established, only stating that it was founded in 2009.

As part of the acquisition of BusinessEdge, that company’s employees were required to sign a non-competition contract with EMC, which EMC acknowledges does not prevent them from competing with EMC because it expired in June 2009, according to the court filing.

However, EMC in the court filing said that a business consultancy like BusinessEdge or Knowledgent depends on experience developed over time and that Knowledgent's promotional materials tout its “market experience,” including “collective knowledge” gained from “working with the world’s leading companies.”

EMC alleges that Knowledgent’s "experience" and "collective knowledge" instead come from EMC.

“Arturi and Casagrande have used and continue to use their knowledge of EMC confidential and proprietary information to instantly and unfairly build Knowledgent as a competing consulting organization based on the very same assets they sold to EMC. In sum, they have unfairly and illegally taken back, and continue to take back, the assets -- in the form of proprietary information and business goodwill – that they sold to EMC in August 2007,” EMC alleged in the court filing.

EMC also claims in the lawsuit that Knowledgent hired eight former BusinessEdge personnel, all of whom resigned from EMC between November 2009 and February 2010, and allegedly are still recruiting such personnel.

In the lawsuit, EMC is asking the court to permanently enjoin Arturi, Casagrande and Knowledgent from using confidential EMC information and recruiting EMC employees and asked that the defendants pay unspecified monetary damages and court costs.

EMC said it declines to comment on legal matter as a matter of policy.

Arturi, Casagrande and Knowledgent did not respond to requests for information about the lawsuit.