Fairfax Tech Firms Settle Software Suit

A Fairfax County technology company has agreed to pay a rival $4.5 million to settle a lawsuit accusing it of stealing computer software.

Razorsight also agreed to stop using the intellectual property from Teoco, a Fairfax County company that had developed software to process and audit billing among telecommunications carriers.

Teoco filed suit last September, claiming that Razorsight had stolen source code for software that loads and processes telecom invoices. Razorsight founder Sundeep Sanghavi worked for Teoco before launching the company.

The settlement, approved by the U.S. District Court for the Eastern District of Virginia, also calls for Razorsight to submit to a follow-up audit to ensure that it is no longer using Teoco software.

"They knew they were wrong and have until September to purge themselves completely of our intellectual property," said John Devolites, Teoco's general manager. "It is a sad commentary that these former employees had to misappropriate our software in order to start a business."

Razorsight's chief executive called the settlement a "business decision." The company this week announced that it had received a $9 million investment from Sierra Ventures, a privately held venture firm.

"There were some things in the settlement we agreed to in the spirit of putting this behind us," said Charlie Thomas, Razorsight's chief executive. "Had we gone all the way to trial, there would have been different outcomes. We wanted to put this behind us and focus on significant growth and winning the marketplace."

Privately held Teoco stands for The Employee-Owned Company and was founded in 1994.