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‘A typical racket, simple as that’ Nginx co-founder Maxim Konovalov explains Rambler's litigation against his company, which develops the world’s most popular web-server

Source: Meduza

Russia’s IT industry is in the midst of a major conflict between businesses belonging to “Rambler Group” co-owner Alexander Mamut and the company “Nginx,” created by Igor Sysoev and his partner Maxim Konovalov. Nginx’s key product is the eponymous web-server used by more than a third of the world’s websites. Sysoev first released the software in 2004, while still an employee at Rambler, which is now claiming exclusive rights to Nginx, based on its interpretation of Russian law. The police have already joined the dispute, launching a criminal investigation and searching Nginx’s Moscow office. In an interview with Meduza, Nginx co-founder Maxim Konovalov described the police raid and explained why he thinks it took Rambler 15 years to claim ownership over the coveted web-server technology, which recently sold to the American corporation “F5 Networks” for $670 million.

Were there any signs that this conflict was coming?

No. It all happened unexpectedly. No one from Rambler approached us with any suggestions or communication. It’s all being done suddenly, according to our Russian tradition, so the shakedown is even tougher. We’ll see how it all ends, but we didn’t expect anything like this.

Meaning there was no option to sort this out in court civilly, without involving the police?

There’s nothing here for the courts, which is why they went with brute force: intimidate us and collect some kind of thin evidence, and then go to court… I don’t even know what will happen next according to the Criminal Code and whatever statute. I don’t understand what's going on over there at Rambler, but apparently they want money. 

Are you firmly convinced that this is Rambler’s initiative and not someone else’s? Maybe their new shareholders are behind it?

I’m sure of this, though the report [filed with the police] might not be from Rambler itself. We still haven’t been allowed to read the case materials. God knows what company is listed there. Maybe it’s called something else, but in fact it’s Rambler.

Why is this happening now, 15 years after the web-server was created?

It’s because of the deal with F5 Networks. That 100-percent served as the trigger. Since then, [Rambler’s representatives] have been quietly preparing, collecting whatever materials, and building this whole story.

What exactly happened yesterday?

In the morning, officers from the Interior Ministry’s “Department K” [IT crimes unit] came to my home and to Igor [Sysoev]’s home. Then there was a search and seizure of computer and mobile equipment, and some documents related to the company. Everything was professional and polite, if you exclude the fact that special forces agents were standing around with automatic weapons. Well that and having to explain to my child why there were armed guys in our apartment at 7 a.m. Then there were interrogations. Generally speaking, the questions weren’t particularly interesting or pleasant.

What’s your current status in the case?

I can’t go into any details on this subject. I don’t want to violate anything or give anyone an extra trump card.

But you haven’t been charged with anything?

No, not yet.

Has there been any help from F5 Networks?

Yes, of course, we notified them, and people are getting involved and working out and developing a defense strategy. Me and Igor, who’s sitting right next to me, intend to fight this, and we’re absolutely sure that we’re in the right. We committed no crimes, and we’re working for the benefit of Russia, creating a famous Russian product that is virtually unrivaled around the world. I don’t feel a shred of guilt. I also want to say that we didn’t expect so much [public] support, since we work in a niche field that doesn’t interest many people. Who the heck knows what a web-server is? Yesterday, I even had to write an explanation for the state investigator about what a web-server is.

Before, when you were closing investment rounds and later selling the company to F5 Networks, did any of your investors have any questions about ownership of the software’s exclusive rights?

At all stages, investors performed their own due diligence, sometimes using the best practices from previous rounds of investment, but always verifying the information themselves. It wasn’t: “Well, okay, they’ve already done the due diligence.” They always check the company carefully because it’s their money at stake. There were never any questions about exclusive rights to the web-server, and we went through due diligence at least a dozen times.

It’s also hilarious that the company Nginx was officially registered in 2011, and it’s now 2019, and in all this time Rambler never raised any issues. Though you’d think they could have come and said, “Guys, what are you doing? Let’s work this out.” Nobody did this. And now it’s all perfectly clear: there was the deal with F5, the big money became palpable, and then we see the desire to grab a piece of it for themselves. It’s a typical racket. Simple as that.