In its press release, Azul claimed, "Sun has repeatedly threatened the company with litigation unless Azul granted Sun part ownership of the company, and agreed to pay exorbitant up-front fees and continuing royalties on the sale of Azul products. Attempts to reach an agreement failed when Sun gave Azul an ultimatum: accept its final proposal or face litigation."

Azul makes Java network servers. Sun developed the platform-independent Java programming language, and the two compete in the network computing space.

According to Robert Haslum, attorney with Heller Ehrman, representing Azul, Sun approached Azul about taking patent licenses. The dispute revolves around about 20 patents relating to data and processing technologies.

As to trade secrets, Azul CEO Stephen DeWitt said, "We don't know their trade secret claims because they've never shared them with us."

"Sun seems to be in disbelief that a young, privately held company can independently create such industry-defining technology. Azul has been forced into this legal process as a last resort," DeWitt piped.

Azul says it "has, on repeated occasions, offered Sun the opportunity to freely verify the truth or falsity of its accusations via audits, technical disclosure, access to its confidential documents, and details of the company’s intellectual property portfolio and development practices. Sun’s unwillingness to engage in any fact-finding endeavor, combined with its ultimatum, illustrates clearly its competitively-motivated intent to use its larger size to distract and consume key Azul resources at a time when the company is gaining increasingly visible and broad customer, partner, and technology traction."

Sun spokeswoman Stephanie Von Allmen declared, "Sun has spent over a year trying to achieve a business resolution to Azul's unauthorised use of Sun intellectual property. During this period, Azul has repeatedly stonewalled and delayed."

Azul and Sun are competitors with a shared history and close ties. Azul's DeWitt was CEO of Cobalt Networks, which was acquired by Sun in 2000. DeWitt then worked for Sun before joining Azul Systems. Azul's chief marketing officer Shanin Khan also worked for Sun before moving to Azul. Other Azul employees are also Sun alumni.

Azul's suit is filed in the Northern District of California. While the suit may drag on for a while, and Sun may counter sue, this situation has settlement written all over it.