Software Company Versata Sues Ford for $1 Billion

July 17, 2015

July 17, 2015—Software company Versata has filed a $1 billion lawsuit against Ford, accusing the automaker of using Versata’s ideas to develop its own software, according to a report by USA Today.

Ford has denied the accusations and commented in a written statement that said, in part, "Ford's patented software does not use or infringe any Versata intellectual property."

Larry Davis, a lawyer for Versata, talked about a meeting on Dec. 19, 2014 between Ford and Versata where Versata was negotiating a five-year contract extension with 13 percent annual increase. Ford wanted the price to stay the same, and the deal fell through. The two companies ended their contract at the end of 2014.  

In February, Versata said it learned that Ford had developed its own version of the software and believes parts of its own trade secrets are in the new Ford program. The software is designed to speed up product development by making sure all the parts in a planned vehicle are compatible.

Versata filed its suit in Texas on May 7 and wants an injunction against Ford from infringing on its patents and using its software. Versata also wants the software returned and seeks damages including costs and legal fees.

Versata believes that Ford’s in-house system was developed by reverse-engineering the software company’s proprietary system and then using some of the same code.

"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," said Michael Richards, president of global automotive division of Trilogy, parent company of Versata, according to USA Today.  

Versata learned about the new software after Ford filed a federal lawsuit in Michigan, asking the court to confirm that its version of software did not infringe of Versata’s intellectual property. There has been no decision made in that case.

"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,” said Ford in a statement, according to USA Today.

Versata first provided software to Ford in 1998 and also provides for General Motors, Nissan, Fiat Chrysler, Toyota, Hyundai, Kia, Volvo and Jaguar.

Davis said the case could take a couple of years before it goes to trial. If the case continues in Texas, the estimated time frame is a trial date around September 2017.