Ford Motor Co. is being sued by a former software supplier for $1 billion that claims the automaker stole trade secrets for product development software.
Versata Inc., a Texas-based software development company, claims in its suit that Ford used proprietary information from the supplier in programs it patented. The company filed the suit on May 7 in Texas.
Ford is denying Versata’s claims and, in fact, filed an earlier lawsuit in Michigan to ensure that its program did not infringe on Versata’s intellectual property. Versata provides similar software to other automakers including General Motors, Nissan, Fiat Chrysler, Toyota, Hyundai, Kia, Volvo and Jaguar.
The supplier claims it discovered the issue in February after contract negotiations last December fell apart. Reports the Detroit Free Press, the two sides were engaged in contract negotiations over ongoing use of the software. Versata asked for double-digit increases for using it and Ford, which wanted to maintain the price at its then-current level of $8.45 million annually, declined.
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Ford says it planned to discontinue using the Versata product at the end of 2014 because it had developed its own software: a program Versata officials claim Ford reverse engineered in order produce its version. Allegedly some of Versata’s protected trade secrets are included in Ford’s patents, according to the company.
“We believe we’ve identified at least three areas where our trade secrets were copied into their patent, and I think we will find more,” Michael Richards, president of the global automotive division of Trilogy, Versata’s parent company, told the Free Press.
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The automaker claims the Versata lawsuit was retaliation for Ford filing its lawsuit, the paper reported.
“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.”
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The Ford said/Versata said case likely won’t see a courtroom anytime soon. In fact, the first major hurdle to clear is where it will be heard: Michigan or Texas. An actual trial won’t likely occur for at least a year, according to Versata officials.