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QLogic Sues Emulex Over Ads: Exclusive

Stocks in this article: QLGC ELX BRCD LSI

ALISO VIEJO, Calif. ( TheStreet) -- Storage networking can be a highly contentious -- even litigious -- issue. Server and storage component specialist QLogic (QLGC - Get Report) has slapped Emulex (ELX - Get Report) with a lawsuit, accusing its rival of false advertising, unfair competition and trade libel.

The complaint, which was filed on Monday in the Superior Court of California in Orange County, alleges that Emulex published misleading information in a recent blog and a video, "purporting to show an egg frying on a QLogic semiconductor chip."


Customers users are keen to reduce the amount of heat in their data centers to avoid outages, focusing attention on components such as semiconductors.

"Emulex has no basis to support its 'datacenter failure' claims, and as a result its claims are false and misleading and intended to deceive potential customers of QLogic products," alleged QLogic, in its lawsuit.

QLogic also alleges that Emulex made untrue statements about the competitive landscape during its recent second-quarter conference call, specifically with regard to Converged Network Adapters (CNAs) that combine server and storage networking features.

Emulex was unwilling to comment on the legal action when contacted by TheStreet. "We cannot comment on pending litigation," said an Emulex spokesman, in an email.

QLogic has not yet responded to TheStreet's request for comment.

This, however, is not the first time that QLogic and Emulex have been embroiled in a legal battle. In 2004 the companies signed an agreement to settle outstanding patent disputes.

Shares of both companies rose during Thursday trading. QLogic's stock gained 39 cents, or 2.37%, to reach $17.09, outpacing the broader advance in tech stocks that saw the Nasdaq rise 1.32%. Shares of Emulex rose 11 cents, or 0.87%, to $12.22.

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