A Brief Raid History: What’s Yours Is Ours, Rambler Said in Nginx Ordeal

Cases

February 14, 2020

Raid Summary

For almost a decade the Russian Internet giant Rambler paid scant attention to Nginx, a web-server software company that one of its former computer techs, Igor Sysoev, co-founded in 2011.

That changed when America’s F5 Networks bought Nginx in 2019 for $670 million — a price that exceeded Rambler’s value.

Rambler and its main financial backer, Sberbank, suddenly saw Nginx as a gold mine that could be raided.

Rambler asked Russian prosecutors to file criminal charges against Nginx. The allegation was that Sysoev developed the source code for Nginx while a Rambler employee two decades before — so the code was Rambler’s property. Sysoev has denied that, saying he developed the code in his spare time, not at work.

In December 2019, police raided Nginx’s Moscow office, seizing documents and property and detaining Sysoev and Maxim Konovalov, the other Nginx co-founder.

Konovalov called the criminal charges a blatant attempt to take over Nginx, or strip it of much of its assets, without compensation. In other words, a classic example of reiderstvo.

Konovalov noted that Rambler never brought up the source-code issue with Nginx until the F5 Networks acquisition bolstered Nginx’s value to the point that it became a prime raiding target. “Then we see the desire to grab a piece of it themselves,” Konovalov said. “It’s a typical racket. Simple as that.”

One thing Rambler didn’t count on was Russia’s tech community screaming about the Nginx raid. Its reaction was so swift, and so angry, that the company held an emergency board meeting and quickly dropped the criminal case against Nginx.

But Nginx is still not out of the woods. Rambler now plans to try to get a massive civil judgment against Nginx. Given how susceptible Russian judges are to bribery, intimidation and influence-peddling, it could succeed.