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Ford sued for intellectual property theft

California motorists who own Ford vehicles may have heard that the auto manufacturer is being sued for intellectual property theft. On May 7, Versata, a software company, filed a complaint against Ford for using its software without permission. Then on June 3, the Texas software company asked a judge to issue an injunction against Ford.

The intellectual property dispute has its genesis in a contract signed in 1998 pursuant to which Ford agreed to pay Versata $8.45 million per year to use the company's software. The software, called Automotive Configuration Manager, was used in Ford's vehicle development process to identify incompatible vehicle parts. Ford used Versata's software until 2014 when the vehicle manufacturer purportedly developed its own software.

Although Ford received a patent for its internally developed software, Versata claims that the software was not Ford's original creation. According to a lawyer representing Versata, the information that Ford gave to the patent office contained a code that was derived from a code owned by Versata. The lawsuit claims that the Ford employees who developed the newly patented software were the same employees who worked on Versata's software. However, Ford claims that its engineers developed vehicle configuration technology that is very different from the Automotive Configuration Manager that is owned by Versata.

The owner of a software company may want to consult with an attorney who has experience in intellectual property matters before signing a license agreement with another party. Legal counsel may be able to help protect the company's ownership of its proprietary assets while software is being licensed and after the agreement has ended.

Source: Automotive News, "Ford accused by software maker of intellectual property theft," Nick Bunkley, June 4, 2015

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Klein & Wilson

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