Ford Motor Company Accused by Texas Software Developer Versata of Allegedly Stealing Trade Secrets and Misleading U.S. Patent & Trademark Office in Federal Court Action

During national telephonic press conference today, Washington D.C. attorney Lanny J. Davis, citing legal papers, states: "Now is the time to hold Ford accountable in the daylight of transparency in federal court under the rule of law."

Jun 04, 2015, 13:07 ET from Versata

AUSTIN, Texas, June 4, 2015 /PRNewswire/ -- Texas auto industry software developer Versata, Inc. last night moved in the U.S. District Court for the Eastern District of Texas to obtain an injunction against Ford Motor Company, accusing Ford of stealing its patented auto development software, called "Automotive Configuration Management" (ACM), and its trade secrets.

The injunction motion by Versata asked the federal court to prohibit Ford from using Versata's software, which it alleged Ford had stolen from Versata as well as Versata's trade secrets, in order to copy and develop similar replacement technology.  Versata also sought a court order requiring Ford to comply with the licensing agreement's plain language allowing Versata, upon termination of the agreement, to enter Ford's premises to verify that Ford had not stolen or copied Versata's software. As stated in the injunction motion, Ford has violated its contractual promises to Versata and misappropriated Versata's software and trade secrets.

In the absence of such an injunction, Versata alleges, it would suffer irreparable injury.  Versata's preliminary injunction motion alleged in factual detail Ford's conduct as being characterized by deceit, secrecy, and subterfuge, including filing a "sealed" secret law suit in Michigan which the U.S. District Court found was a violation of the court's rules, and as a result, issued a "Show Cause" order with respect to Ford.

The gist of the injunction motion filed can be fairly characterized as about four simple principles, according to Lanny J. Davis, attorney for Versata:

First, you cannot steal someone's intellectual property and get away with it – especially when that property required years of effort and more than tens of millions of dollars, and thousands of man hours of investment and you benefited from using it even more so.

Second, you can't then try to cover up your theft by not keeping your word – failing to honor the plain words of a written contract allowing the owner of the property access to your workplace to verify whether or not the owner's intellectual property has been stolen or compromised.

Third, you can't mislead the U.S. Patent & Trademark Office by applying for a patent without disclosing that your proposed "new" invention in fact was derived, in whole or in part, from copied trade secrets and patented software.

And fourth, when your plan is discovered by the victim, you can't be allowed to use trickery and deception to try to get the contract extended and then misuse the court system by filing a "sealed" complaint contrary to the court's rules in order to try to gain a tactical advantage.

Plaintiff Versata alleges that Ford violated all four principles and would cause Versata irreparable damage unless a preliminary injunction is issued.

Davis stated, "The basis of Versata's motion seeking an injunction is as simple as fundamental fairness – Versata's right to own and protect its property from theft. Versata spent over a decade and tens of millions of dollars to develop its software to the considerable financial benefit of Ford. We will not allow Ford to steal it and use it without paying for it," attorney Davis said.  "It is also about the principle in business or life of keeping one's word – requiring Ford to honor its written, contractual commitments. 

For over a decade, Ford used Versata's ACM software as its core technology for vehicle design and product development, saving Ford hundreds of millions of dollars. 

Versata asked the federal court to order Ford to comply with its original ACM license agreement, giving Versata the right to conduct an "on site" verification of compliance at Ford's offices in Dearborn, Michigan upon termination of the agreement. Ford denied Versata access that was promised in the plain language of the agreement. This was necessary to ensure that Versata's patented software and trade secrets were not being stolen or copied resulting in "irreparable harm" to Versata if the injunction is not issued. 

Ford also refused to disclose the names of the individuals who worked on the replacement product, even though Versata has identified at least six people who had access to Versata's technology. In fact, the same individual at Ford who was the primary manager of the Versata software was also the program manager for the software that Ford developed based on Versata's technology.  After Versata confronted Ford about its new patent in December 2014, Ford assured Versata there was a "Chinese wall" between both products. But, attorney Davis asked how can there be a Chinese wall if the same individuals were on both sides?

According to Versata's legal papers, Ford "used procedural gamesmanship to gain an advantage in the dispute" to try to coerce Versata into accepting an extension of the ACM license agreement without any price increase. 

Davis added, "We are confident that after due process of law in open court, the court will reach a just result."

This Motion for Preliminary Injunction is in reference to case number: 4:15-CV-00316, filed in the U.S. District Court for the Eastern District of Texas, Sherman Division.

About Versata Software, Inc.
With a global presence covering 45 countries, Versata Software, Inc. and its affiliates solve the most complex business problems for the world's largest organizations. Versata's family of companies includes a number of leading enterprise solution providers, including Versata, Inc., Instance, Inc., Artemis International Solutions Corporation, Genzyme Corporation, Clear Technology, Inc., Everest Software, Tenfold Corporation, Cora Software, Inc., Evolutionary Technologies, Inc., and Alter Point, Inc. Versata distinguishes itself in the software industry by focusing on customer priorities as driven by value delivered. Versata's market-leading Customer Success Program ensures customer involvement in product decisions and business priorities and provides twice-yearly opportunities for customers to score Versata's performance against commitments. Versata's world-class engineering capability ensures substantive and valuable product releases, thereby ensuring customer success. Versata's relentless focus on customer priorities, coupled with an unmatched global engineering capability, provides Versata customers continuous innovation and repeatable value propositions. For more information, visit www.versata.com.

SOURCE Versata



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