Lynwood Investments Sues F5 Networks Over Popular NGINX Web Server Software Used by 450 Million Websites Globally
Lawsuit Regarding NGINX-based Enterprise Also Names Former Employees of Russian Media and Technology Firm Rambler, and Venture Capital Firms
Lynwood Investments CY Limited has sued F5 Networks, Inc., a number of former employees of Russia-based Rambler Internet Holding LLC, their associates, and two major venture capital firms, in the United States District Court for the Northern District of California in San Francisco, in a dispute concerning the NGINX web server software business enterprise. The NGINX software helps run an estimated 450 million websites around the world. Lynwood seeks damages of at least $750 million in the action.
In May 2019, F5 Networks paid $670 million to acquire the NGINX-based enterprise from NGINX, Inc., a company formed in 2011 by former Rambler employees Maxim Konovalov and Igor Sysoev, and others, prior to their departure from Rambler. The NGINX web server software is used to operate an estimated 450 million web sites worldwide.
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The lawsuit, however, alleges that Lynwood, not NGINX, Inc., F5 Networks or the other named defendants, is the rightful owner of the NGINX enterprise, including the NGINX software and related commercial software offerings known as NGINX Plus, through an assignment from Rambler.
The NGINX software was developed principally by defendant Igor Sysoev and other former Rambler employees during the course of their employment with Rambler, located in Moscow, from 2001 to 2011. The suit alleges that the NGINX software and related proprietary extensions thereto, including NGINX Plus, constitute works for hire owned by Rambler, and now Lynwood as Rambler’s assignee.
According to the complaint filed by Lynwood, the underlying facts giving rise to the suit were discovered after a whistleblower currently residing in the U.S. disclosed the misconduct in 2019. Lynwood then conducted its own extensive investigation, including a forensic analysis, to verify the whistleblower’s revelations before filing suit. The investigation revealed evidence that the former Rambler employees had gone to great lengths to hide their plans and efforts to take the NGINX software and related enterprise and monetize it for their own benefit, without Rambler’s knowledge, consent or participation, the complaint states.
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Named defendants in the suit include F5 Networks, Konovalov, Sysoev, Andrey Alexeev, former Rambler employees Maxim Dounin and Gleb Smirnoff, NGINX, Inc. and related entities, Angus Robertson, formerly an executive at NGINX, Inc. and now with F5 Networks, as well as Silicon Valley venture capital firms Runa Capital and E.Ventures.
Lynwood is a seasoned international holding company that invests in a variety of industries across Europe. Lynwood and its affiliates held substantial ownership stakes in Rambler, and Rambler has assigned its ownership of the NGINX software and the related NGINX enterprise to Lynwood, together with the claims alleged in the lawsuit. The assignment was approved by the Rambler board of directors.
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