Ford Accused By Software Developer Of Stealing Trade Secrets

The lawyer who is representing Texas software company Versata in its lawsuit against Ford Motor Company is using public gimmicks to get media attention for the case.

Next month, Versata’s attorney Lanny Davis will be holding a press conference in Detroit in front of a fake wall with a hole punched in it, to represent his claim that Ford breached a firewall intended to protect Versata’s intellectual property. Davis says that publicity is the only method at his disposal to even the legal playing field, which he compares to a David versus Goliath battle.

“The only way that we can get a successful result is to let the public, consumers, shareholders – people who think the name Ford means honor – to let everyone know,” says Davis.

The allegation is that Ford used, and paid for, Versata’s design modification software program for years, while it developed an in-house replacement that capitalizes on the software company’s intellectual property. Davis claims that Ford allowed an employee who is familiar with the Versata program to oversee employees working on the replacement, and the result was “methodology, techniques, concepts that could only be derived from us.”

The injunction motion by Versata asked the federal court to prohibit Ford from using Versata’s software, as well as seeking 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.

Versata alleges that in the absence of such an injunction, it would suffer irreparable injury. The software company’s preliminary injunction motion alleged in factual detail Ford’s conduct as being characterized by deceit, secrecy, and subterfuge, including filing a “sealed” secret lawsuit in Michigan, which the U.S. District Court found to be a violation of the court’s rules, and as a result, issued a “Show Cause” order with respect to Ford.

In response to the claims, Ford Motor Company issued the following statement:

“Ford’s patented software does not use or infringe any Versata intellectual property. Ford filed an Eastern District of Michigan lawsuit against Versata several months before Versata’s Eastern District of Texas lawsuit. Versata’s Texas case is a retaliatory attempt to avoid the lawsuit in Michigan, where Ford’s software was developed and used. Ford will move to dismiss or transfer the Texas case to Michigan.”

Ford refused to disclose the names of the people who worked on the replacement product, even though Versata identified at least six people who had access to Versata’s technology. Additionally, the same person at Ford who was the primary manager of the Versata software was also the program manager for the software that Ford allegedly developed based on Versata’s technology. According to the software company’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.

Versata’s attorney stated his expectation for success in the case. “We are confident that after due process of law in open court, the court will reach a just result,” said Davis.