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Ford Accused by Software Company of Stealing Trade Secrets

Motor Trend logo Motor Trend 7/17/2015 Kelly Pleskot

Ford is facing a $1-billion lawsuit after software company Versata accused the automaker of stealing its intellectual property. Versata says the automaker stole trade secrets to create its own software for making vehicles.

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Versata first provided software to Ford in 1998 along with a host of automakers including General Motors, Fiat Chrysler, NIssan, Hyundai, Toyota, and others. Designed to speed up the product development process, the software works to make sure all the parts used on a vehicle are compatible with one another. During contract negotiations in 2014, the deal broke apart after Ford refused Versata's request of 13-percent annual increases. Versata claims Ford reverse-engineered the software company's proprietary technology and used some of the same code to develop a rival system.

Meanwhile, Ford proclaims its innocence. The automaker filed for a patent for its own software technology in 2011 and was granted that patent. In a statement provided to the Detroit Free Press, the automaker said, "Ford's patented software does not use or infringe any Versata intellectual property."

Versata learned Ford was developing its own software only after the automaker filed a lawsuit in Michigan asking courts to confirm there were no infringement issues. That suit is still pending, but Versata went ahead and filed its own lawsuit in Texas this May. It is seeking the return of its software and damages including costs and legal fees.

In a statement, Ford reportedly said, "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."

According to Versata lawyer Lanny Davis, it could take at least a year, if not longer, for the case to go to trial. If it ends up moving to Texas, the two parties could be looking at a court date of around September 2017, he said.

Source: Detroit Free Press

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