August 16, 2004
MicroStrategy vs. Business Objects: Both Claim Victory
One of the documents mishandled by Business Objects provided a detailed description of how MicroStrategy planned to compete against Business Objects, the leader in the business intelligence space after acquiring Crystal Decisions last year for $820 million.
Business Objects thought of the trade secret ruling in a somewhat more positive light. In its own statement, the software maker said the court found that a former Business Objects employee had misappropriated two documents, not the hundreds of files MicroStrategy had alleged were mishandled.
Business Objects further said the court issued a "very narrow" injunction ordering Business Objects not to use or distribute the documents and that it shot down MicroStrategy's request for attorneys' fees.
The same court also found in favor of Business Objects, rejecting MicroStrategy's earlier claims of patent infringement of U.S. Patent No. 6,260,050. It had earlier thrown out MicroStrategy's claim of tortious interference.
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These were a “Competitive Recipe”, detailing MicroStrategy’s plan for dealing with its rival in the market, and a volume discount schedule, detailing thresholds at which MicroStrategy would give customers a discount.
The court therefore granted an injunction against Business Objects, prohibiting the company from possessing, using or disclosing the two trade secrets identified by the court.
The court refused to grant legal expenses to MicroStrategy and, in another ruling, dismissed a claim for patent infringement put forward by MicroStrategy.
Business Objects welcomed the judgment, commenting that the court had found only two cases of misappropriation out of the hundreds of examples put forward, and at the end of the day had issued only a “very narrow” injunction.
“This is an important victory for Business Objects, its employees, customers and shareholders," said Susan Wolfe, senior vice president and general counsel of Business Objects. "These decisions by the Court in Virginia confirm what we have maintained all along - that MicroStrategy's allegations and claims against Business Objects were essentially meritless."
“We are pleased with the court's decision,” responded MicroStrategy Vice President, Law and General Counsel, Jonathan F Klein. "Business Objects misappropriated our trade secrets, and the court issued an injunction prohibiting their use".
"Business Objects' suggestion that its misconduct involved only a single employee and two documents is contradicted by the court's extensive factual findings," he added.
A further patent infringement case between the parties is still ongoing.
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MicroStrategy differed on its view of the decision, with company general counsel and VP for law Jonathan Klein saying he was "very pleased" that the ruling "validated our original purpose in bringing these claims."
Klein said the court's 61-page ruling details how internal MicroStrategy documents - including e-mails, presentations, sales reports and competitive intelligence focused specifically on Business Objects - were circulated widely among Business Objects employees, including some of its top executives.
"When I saw Business Objects' announcement this morning, I thought they could not possibly have read the same ruling I did," Klein said. Business Objects representatives were not immediately available for comment.
In the second decision, the court issued a formal order on a ruling it made last year. The ruling granted summary judgment in favor of Business Objects, rejecting patent infringement claims made by MicroStrategy.
Business Objects and MicroStrategy compete head-to-head in the business intelligence market, particularly in the area of reporting and analytics applications. Business Objects is the larger of the two companies, with sales of $560.8 million in the last calendar year, compared with $175.6 million for MicroStrategy.
Whatever your take on the outcome, the two are going to keep slugging it out over this last patent issue and we’ll see where all the dust settles. In the meantime, if you’re in the BI software business, it’s apparently time to review your non-compete/confidential-disclosure agreements… at least if you’re competing with these two.
- Arik
Posted by Arik Johnson at August 16, 2004 01:49 PM | TrackBack
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