Cybersecurity giant CrowdStrike was in court Tuesday in Austin arguing the city isn’t its home.
The location of its headquarters — which it says is in California — is at the heart of an argument over the proper venue for a trial in a lawsuit alleging the company was founded on stolen trade secrets.
The 3rd Business Court Division’s decision will determine whether the intellectual property case can go forward.
The lawsuit filed by GoSecure Inc. claims two CrowdStrike employees, including a co-founder, “ripped off” systems GoSecure developed for cybersecurity. It says CrowdStrike’s ubiquitous Falcon platform was based on the data. CrowdStrike denies the allegations.
But its chief concern Tuesday was getting the case thrown out of the Texas court and back to California, where it was originally filed.
Marcy Greer, an attorney representing CrowdStrike, asked for the online hearing to be closed to the public citing the presence of an Austin American-Statesman reporter and confidential data in their motions and presentations. Judge Melissa Andrews closed the court over the newspaper’s protest.
GoSecure, a California company, sued its adversary in Texas after, it says, a court in its home state took too long to produce results.
At the heart of the current dispute is whether CrowdStrike has sufficient business ties to Texas for the case to be heard in Austin. While CrowdStrike Holdings Inc. moved its principal offices to Austin in 2021, corporate offices for Crowdstrike Inc. are located in Sunnyvale, Calif. In court documents, CrowdStrike Inc. argues its “decision makers” are all located outside Texas and its Austin office is merely a “satellite” filled with mostly junior sales staff.
CrowdStrike alleges GoSecure fails to distinguish between CrowdStrike Inc. and CrowdStrike Holdings. It also argues the actions at issue — the alleged theft and subsequent design and launch of Falcon — took place in California.
GoSecure argued in filings ahead of Tuesday’s hearing that CrowdStrike’s representations are misleading or false and that the company meets the jurisdictional threshold by its “continuous and systematic” contacts in the state. In its court filings it says Texas is a large market for the company and that it has identified emails with 900,000 individuals believed to be working for companies in the state.
It says CrowdStrike’s largest office is in Austin and that it has numerous engineers and senior executives in the state.
“Even setting aside CrowdStrike’s substantial sales of the Falcon Platform to customers in Texas, CrowdStrike has numerous engineers in Texas who work on the Falcon Platform — including two senior directors for Falcon Complete (built on the Falcon Platform), a senior director of Data Science Operations, and several senior engineers. These are not ‘junior salespeople,’ ” GoSecure says in court filings.
It also argues the company issues press releases from Austin, not Sunnyvale. It calls Austin its “Home” in marketing materials, including those from the company’s F1 Race team. When asked, the company website’s own AI chatbot will say Austin is the company’s headquarters, GoSecure says. The newspaper’s query of the chatbot this week did not return the same result.
No action was taken Tuesday and an order from Andrews is expected in the coming weeks. A redacted transcript of the hearing may be available to the public in coming weeks or months.