Bloomberg (July 20, 2015) — A Texas software company sued Ford Motor Co., claiming the automaker stole trade secrets and is infringing multiple patents.
In a complaint filed July 15 in Sherman, Texas, federal court, Versata Inc. said it disclosed secrets to Ford beginning in 1998 related to software used in designing and configuring automotive product lines.
July 19, 2015
Crain’s Detroit Business (July 19, 2015, 8:00 AM ET) — An Austin, Texas-based company has launched a public campaign to go with its $1 billion lawsuit against Ford Motor Co. Versata Software claims Ford stole its trade secrets by creating a copycat version of a proprietary vehicle development program.
Mike Richards, a Ford employee of 27 years before being let go in 2008, told Crain’s sister publication Automotive News that Versata’s software helped boost Ford profits after the two companies began working together in 1998.
July 19, 2015
Automotive News, Detroit, MI (July 19, 2015, 12:01 AM ET) — During a 27-year career at Ford Motor Co., Mike Richards oversaw the launch of the first Lincoln Navigator and held several high-level marketing positions. At one point, he had an office next to now-CEO Mark Fields.
Despite being let go in 2008, when the automaker was slashing jobs to survive the industry downturn, “I still have blue blood,” Richards told Automotive News this month. “I am still as loyal to Ford as they come.”
But in his new life as a software company executive, Ford has suddenly become Richards’ adversary.
Ford Motor, the second largest US automaker, has been sued by a former software supplier asking one billion dollars in compensation for allegedly misusing trade secrets for product development software.
The plaintiff, Versata Inc. from Texas, is a software development company that claims Ford used without prior consent the company’s proprietary information in certain programs it then went on and patented as its own.
July 16, 2015
Detroit Free Press, Detroit, Michigan (July 16, 2015) — Texas software company Versata has filed a $1-billion lawsuit against Ford, accusing the automaker of stealing intellectual property it used to develop its own rival software.
Lanny Davis, a lawyer for Versata, was scheduled to be in Detroit today to level the accusations against Ford at a staged media event.
Ford denies the accusation and would only comment for this story in a written statement that said, in part: “Ford’s patented software does not use or infringe any Versata intellectual property.”
July 16, 2015
Press Conference, Detroit, Michigan (July 16, 2015) — Versata has asked me to correct the public record regarding misstatements and distortions made by Ford in its legal filings regarding Versata’s rights to protect its trade secrets and patented technology called Automotive Configuration Management (“ACM”). That is what I am doing, with full respect to the judicial process and to my professional ethical responsibilities.
The ACM technology allows Ford to introduce new features and changes in its automobiles, which normally would trigger millions and billions of possible effects on the configuration of the modified model. But with ACM that process is stream-lined and made more efficient, with savings for Ford – working closely with Versata as a contractor-partner over nearly 20 years – totaling over one billion dollars. Versata, trusting Ford, has shared all its patented code, trade secrets, and know-how to allow it to use the technology to save it these substantial sums over the years.
Opinions and Allegations
Versata and I as their attorney are expressing our opinion and allegations in this statement. We are in the beginning of litigation in Michigan and in Texas. No facts have been decided by the ultimate decider of facts – the judge or the jury or both. Ford is entitled to disagree with Versata’s allegations of facts and opinions and characterizations. No sentence or fragment of this statement should be taken out of context.
I on behalf of Versata will be asking Ford various questions today.
It is time for Ford to turn the lights on, practice transparency as we at Versata are doing regarding this case, and answer our and the media’s questions. “No comment” won’t do anymore.
To Ford: Why not allow Versata in to inspect under the contract?
The most important question Versata is asking Ford to answer today is:
If you disagree with Versata’s allegations that Ford stole, in whole or in part, Versata’s core ACM technology and trade secrets, then why not let Versata and/or a neutral third party, examine Ford’s alleged substitute program in detail – its code, underlying designs and communications, emails, etc., during its development, rules and manuals. The license agreement Ford signed requires that Versata be given such access to verify that its patented ACM software and trade secrets have not been compromised – and to do so on site.
Why, we ask, won’t Ford say yes and allow Versata the access to which it agreed in the license agreement?
So far Ford continues to say no.
Why? What is Ford hiding if it has nothing to hide?
Versata says today to the media:
Don’t accept Ford’s insufficient offer to allow Versata onto its site to confirm that its software has been deleted from Ford’s servers. Ford knows — and they know Versata knows — that merely allowing Versata to confirm deletion of its software from Ford’s servers will prove nothing. Full access to individuals who worked on the substitute product is required and the documents pertaining to the new substitute Ford software is required.
Here to will fill in some of the details under the main themes of lies, deception, and cover-up is Mike Richards, a Versata executive and former senior manager for Ford over many years, as he just discussed.
The December 19, 2014 Ford-Versata Meeting: The Big Lie
We heard Mr. Richards describe the conduct at the highest levels of the Ford IT department.
I will focus today on the key moment in time: when what Versata alleges is the Big Lie and Cover-Up began.
And in the weeks and months ahead, Versata will expand on the alleged facts showing instances of intimidation and threats by Ford regarding this matter.
Versata is baffled by this conduct towards its business partner and contractor for more than 15 years, taking advantage of Versata’s technology and know-how that has been a crucial basis for cost savings in excess of $1 billion – used by its personnel all over the world.
When we mention Ford has saved over $1 billion over the years thanks to Versata’s ACM software, we can point to actual cash savings in such categories as reducing recall expenses, reducing warranty expenses, and particularly from costs of delays in bringing new models and new features to the market.
Versata’s law suit filed last May in federal court in the Eastern District of Texas – which was served first on Ford to start the litigation before Ford belatedly served Versata regarding its law suit in Michigan – will seek to recover these more than $1 billion in cash savings on the legal basis of “unjust enrichment” – i.e., Ford has been unjustly enriched as a result of its theft of Versata’s technology.
Today on behalf of Versata I am here to describe in detail something new – and that is the reason why there is a brick wall behind me with a huge hole in it.
The hole in the wall is an emblem of Ford’s broken promise – the specific alleged Big Lie that occurred on December 19, 2014.
That was the date that Versata learned for the first time that Ford had allegedly created a substitute software, called “PDO,” so it would no longer need Versata’s technology.
Versata was concerned when it heard this shocking news on December 19 for the first time. It knew it had been deceived while this secret effort had continued at Ford for years, at the same time Versata was in the offices of Ford sharing its confidential code and trade secrets underlying is ACM technology.
Versata managers asked themselves: Had Versata’s patented software and trade secrets been protected from those who were involved in inventing the allegedly new and different substitute Ford software, “PDO”?
Versata’s general counsel asked a crucial question when he heard this news. He used an expression familiar to businesspeople and professionals who want to separate confidential information that shouldn’t be shared within an organization. It is called creating a figurative “Chinese Wall.” He asked Ford managers whether such a figurative “Chinese Wall” had been established by Ford to protect Versata’a technology.
The Ford senior officials and attorney at the meeting assured the Versata team that, in fact, a “Chinese Wall” was kept in place during the development of their substitute technology that guaranteed Versata’s trade had not been compromised – at all. The “wall” was effective, they said.
Versata now believes that was a lie – and that the Ford managers present at the meeting knew it was a lie when they said it.
Indeed, Ford has revealed in their own court filings, perhaps without realizing it, the names of more than a dozen individuals who had access to Versata’s ACM software and who were also part of the team developing Ford’s alleged replacement technology, called “PDO.”
These individuals knew how Versata’s ACM technology worked, knew many of the key trade secrets, and many worked closely with the Versata technology over the years. And now it cannot be disputed that these same individuals were ALSO on the on the other side of the wall working secretly for years on developing the so-called substitute PDO program that performs the same or similar functions as Versata’s ACM technology.
And as hard as it is to believe this is a fact that is not in dispute –
The program manager for Versata’s ACM software was also the program manager for the secret group developing the PDO. We are not making that up.
So today Versata and I ask Ford, and hope the media will ask Ford:
Will you deny that on December 19, 2014, your representatives assured Versata’s representatives that those who worked on the substitute Ford software were separated by a figurative “Chinese Wall” from those who were familiar with and worked on Versata’s ACM technology and trade secrets?
Will you deny that you assured Versata managers on December 19, 2014, that there was, in fact, a “Chinese Wall” separating the two groups of people?
Do you agree that if you are going to have such a figurative Chinese Wall, you can’t have the same people on both sides of it?
Will you deny that the same Ford manager who was the program manager for Versata’s ACM software was also the program manager for the replacement software?
Will you deny that there were about a dozen or more Ford employees or contractors who were on both sides of the wall?
Will you deny that the brains of individuals who had intimate knowledge of Versata’s ACM technology and trade secrets can’t be divided by a Chinese Wall? And will you deny that the other side of their brains can make use of it as they develop a substitute technology performing the same or similar functions?
Finally, are there implications for the Ford brand about this alleged pattern of lies and deception regarding Versata’s trade secrets and ACM software?
If you lie about there being a “Chinese Wall” and justify people being on both sides of it, is there any consumer of Ford products who can trust Ford to tell the truth?
If Ford lied to and betrayed a loyal vendor and business partner over many years such as Versata — then is there any vendor that sells to Ford who can entirely trust Ford to honor its contract commitments and to protect its confidential information?
Is there any other small company selling its products to Ford who can afford to lower its guard or trust with confidence it won’t be crushed when it gets in Fords’ way?
These are Versata’s sincere and deeply-felt questions. They deserve Ford’s answers – especially as a public company to its shareholders.
So now you know why we started this press conference with a preview clip from a 2008 movie called “Flash of Genius.”
This is a true story about a man named Robert Kearns who invented the “intermittent windshield wiper,” took his patented invention to Ford, and trusted Ford to do the right things. Instead, he said Ford stole his invention, ran over him – and he said they thought they could get away with it.
Well, as you saw, Mr. Kearns knew he was just a little guy fighting the giant Ford – but that didn’t stop him from fighting, because he felt he was right: theft is theft.
He felt that just because Ford is big enough to be willing to steal someone’s invention doesn’t mean they should get away with it.
Well, Versata isn’t Robert Kearns, and its technology isn’t the intermittent windshield wiper.
But what Versata and Mr. Kearns have in common are the perceptions that they experienced the same thing at the hand of Ford’s senior managers of the IT department and those supervising them — lies, deception, and theft by Ford of someone else’s invention.
And that is why Versata believes it is fair to ask the question to consumers, vendors, and shareholders:
Can Ford be trusted?
That is the basis behind our new website that I’d like you all to visit:
This website contains Versata’s perception of the facts and circumstances behind Ford’s lies, theft, and deceit – all to the detriment of Versata and for the substantial financial benefit of Ford. And we will continue to update it with facts and documents as we proceed to prove the facts and the truth behind our allegations.
In the coming weeks and months, we will continue to try to correct the public record concerning Ford’s alleged lies and deceptions, which they repeated in their legal filings.
In the near future, we expect to document that Ford is also engaging, at the present time, in an active cover-up – using intimidation, threats, and bullying against ex-Ford employees and even some subcontractors to prevent them from talking to Versata investigators trying to obtain the facts and the truth.
How do we make sense of this alleged misconduct? What specific individual or individuals are behind it?
Our investigators believe they are making progress on answering these questions.
July 16, 2015
Southfield — An attorney for Texas-based software company Versata — which is suing Ford Motor Co. for more than a billion dollars for allegedly stealing trade secrets — said at a press event Thursday his client plans to take the case to trial and win.
“We intend to prove that our software and our design was stolen, stolen through deceitful activities, and that now we’re watching a coverup unfold,” said Lanny Davis, attorney for the software company.
The software in question can gather every possible configuration of an automobile — engine sizes, optional features, etc. — and determine which ones would be unfeasible (for example, a car with a sunroof couldn’t including rear air conditioning ducts on the roof). Versata says it’s invested about $300 million to develop the technology and that it saves Ford significant time and money. Ford began working on its own software in 2010, Versata says.
July 16, 2015
“You looked us in the eye and said you protected
our technology and you lied,” said Davis.
Detroit, Michigan (July 16, 2015) — At a press conference today in Southfield, Michigan, not too far from Ford Motor Company’s corporate headquarters in Dearborn, Michigan, Versata attorney Lanny J. Davis, standing in front of a brick wall with a large hole in the middle, accused Ford of lying about protecting Versata’s valuable trade secrets and technology that saved Ford over $1 billion dollars over the last 10 years.
Davis began the press conference by reminding Ford that the only reason he is going to the media as an attorney is to provide facts and correct the record of false, defamatory, and deceitful statements made in Ford’s published court filings that cannot await correction until a final verdict occurs in the litigation. In order to get the facts out, Versata has established a website: www.truthaboutford.com.
Before Davis began his comments at the press conference, he played a short excerpt from the movie, “Flash of Genius,” depicting the story of college professor and part-time inventor Robert Kearns. Kearns invented the intermittent windshield wiper and took the idea to Ford, with assurances and promises by Ford that they would honor his invention. Then, after Ford stole the invention, he spent the rest of his life fighting them as they tried to get away with their theft without paying for it.
“We’re seeing the sequel of this true story in real life today in the way Ford is treating Versata, especially the undisputed facts about the lie concerning the ‘Chinese wall’ that was expressly promised to Versata, but not delivered” Davis stated.
Davis detailed the specifics of what occurred on December 19, 2014 when Ford senior managers and attorneys informed Versata executives for the first time that Ford had duplicated Versata’s automobile configuration technology. The Ford executives at that meeting assured Versata executives that there was a “Chinese Wall” separating those who worked and knew the trade secrets associated with Versata’s technology from those on the other side of the “wall” who allegedly secretly worked on duplicating Versata’s software. Versata invested several hundred million dollars over many years to develop this patented technology.
Speaking at the press conference with Davis was the President of Versata, Mike Richards who also attended the meeting with Ford on December 19, 2014.
While standing by the replica of the brick wall, Richards stated, “They lied. They looked us in the eye and they told us there was a Chinese Wall knowing full well that there were more than a dozen people on both sides of the wall, including the program manager for Versata’s technology who was also secretly supervising the group developing the replacement technology.”
The names of these individuals were publicly disclosed, probably without realizing the implications, in public court papers Ford filed in federal court.
Davis continued, “Today, I call on Ford to deny or affirm that what I just said was the truth – that there was no Chinese Wall — because how could there be if there were people on both sides of that wall? I call on Ford to look at the wall behind me to deny that the huge hole in it was exactly what they knew on December 19, 2014 when they lied to us that there was no such hole.”
The lawsuit Versata filed in Texas against Ford in May 2014 will seek more than $1 billion in unjust savings derived from the theft of its technology program.
Davis said, that in coming weeks and months, as investigation of the facts continue, he will be detailing that Ford not only engaged in deception, trickery, and secrecy, but they are trying to cover it up by attempting to thwart Versata’s investigation of the true facts behind its theft of the Versata’s technology.
As previously stated, here are the examples of trickery and deception by Ford Motor Company:
For more information please visit www.truthaboutford.com.
The press conference, and lawsuit, 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.
July 10, 2015
DAVIS TO FORD: “YOU PROMISED A CHINESE WALL TO PROTECT VERSATA TECHNOLOGY AND YOU LIED. HOW CAN PEOPLE BE ON BOTH SIDES OF THE WALL?”
Lanny J. Davis, Washington, D.C. attorney for Versata, will host a press conference to address Ford’s deception and manipulation in stealing proprietary trade secrets from Versata. Ford breached the obligation by allowing employees on both sides of the company’s Chinese Wall and, subsequently, misrepresenting the truth to block a neutral, third-party investigation into the matter.
Who: Lanny J. Davis, Attorney for Versata Software
When: Thursday, July 16, 2015
12:30 PM ET: Lunch
1:00 PM: Remarks to begin, followed by Q&A
Where: The Westin Southfield Detroit
1500 Town Center
Southfield, MI 48075
Nicolette Room – 2nd Floor
RSVP – Olga Demetri
Ford summoned Versata to meet on December 19, 2014 – on the eve of the holidays – at Ford’s headquarters in Dearborn, Michigan. The meeting was attended by Versata executives Mike Richards and Greg Gunwall, Versata attorney Lance Jones, Ford executive Dave Baxter, and Ford attorneys Damian Porcari and Jennifer Qussar.
Ford led Versata to believe that the purpose of the meeting was to resolve a contract dispute. However, when Versata arrived, Ford brazenly advised them that Ford was decommissioning Versata’s ACM software in order to replace it with Ford’s own in-house version, called PDO.
Versata pressed Ford if they honored their confidentiality agreement while developing their new product. In response, Ford became defensive, and the bravado they had previously shown when informing Versata of the decommission was gone. They confirmed they had established a “Chinese Wall” to separate the groups and ensure that the new software did not utilize any Versata software or trade secrets. Porcari even went so far as to say that there was “complete separation,” and Qussar and Baxter both reinforced that position.
At this meeting Versata also learned that the very same manager who supervised Versata’s software at Ford for more than ten years was the lead manager for Ford’s “new” in-house product.
Appalled by these findings, Versata cited the language of the confidentiality agreement in more detail. As they did, Damian Pocari began nudging Jennifer Qussar, and Dave Baxter was visibly squirming in his chair uncomfortably. Versata suspected something was seriously wrong – and they were right.
Since that meeting, Versata has identified at least 14 individuals who worked on both sides of the supposed Chinese Wall promised by Ford. They were working on Versata’s software while at the same time using that technology to develop their own in-house version, which was derived from trade secrets they stole from Versata. Ford took no safeguards during this deceitful process, and Versata’s valuable property was not protected according to the confidentiality agreement they relied on and trusted Ford with. Versata only learned later that that trust was severely misplaced.
Ford lied to Versata, face to face, about protecting their product, the confidentiality of the software, and even decommissioning the software. They are still using Versata’s technology to this day. Ford must think they are above the law and that stealing from a small company is acceptable. This breach can be categorized simply as unlawful, deceitful, and outright theft.