24 Apr 2020 14:10

Rambler Group files motion to drop copyright infringement charges against Nginx

MOSCOW. April 24 (Interfax) - The Rambler Group management has filed a motion to drop the criminal case against Nginx on counts of copyright infringement, the Rambler Group said in a statement.

Additionally, Rambler Group terminated its agreement with Lynwood Investments, which was designated by Rambler in 2015 to protect its copyright on the Ngnix web server software.

The Internet holding's board of directors gave the instructions to the Rambler management in December 2019.

"According to the termination conditions, Lynwood Investments CY Ltd retains the right to prove the infliction of losses and to seek their compensation in this case on its own behalf and to its own benefit, but has no right to conduct any business on behalf of Rambler Group," the statement said.

The Nginx Moscow office and the homes of Nginx General Director Maxim Konovalov and company founder Igor Sysoyev were searched on December 12, 2019. Konovalov told Forbes that both businessmen were questioned for about four hours, and their computers and mobile devices were seized. The media said that the investigative procedures were conducted within the framework of the case opened by the Moscow branch of the Russian Interior Ministry on counts of "violation of copyright and neighboring rights," as unnamed Rambler employees developed the Nginx program, which Rambler deems "a company product," distributed it as open-source software, and transferred the rights to Nginx Inc.

Rambler claimed a violation of its right to the Nginx web server program on December 12, 2019. According to Rambler, the web server was developed by its employee Sysoyev in the early 2000s. Therefore, "any use of this program without the consent of Rambler Group violates its exclusive right," it said.

Meanwhile, former top managers and shareholders of Rambler Group indicate that the Nginx web server program was not developed in the context of Sysoyev's employment as a Rambler system administrator in the early 2000s and that the company previously did not consider its rights to have been violated.

The Rambler Group Board of Directors unanimously decided on December 16, 2019, to task Rambler management "with filing a motion with Russian law enforcement authorities to terminate the criminal proceedings and with continuing to protect company interests in the field of civil law, if necessary."

The call for a civil law proceeding has been made, in particular, by top managers of PJSC Sberbank, which has owned 46.5% of Rambler Group since August 2019. In the beginning, Sberbank was unaware of the initiation of the criminal case against Nginx.

According to Crunchbase, the company Nginx was established in 2011 on the basis of Sysoyev's products. The company provides open-code software to companies and support to servers of such companies as Yandex, Mail.Ru Group, and Rambler, according to information posted on the company's website.

So far, Nginx has drawn $104 million investment in seven takes, including from Runa Capital, Index Ventures, and Goldman Sachs. The U.S. company F5 Networks announced the purchase of Nginx for $670 million in March.