RealTime IT News

BI Software Firms Trade Legal Blows

In a bitter case between business intelligence software rivals, a federal court has enjoined Business Objects from using confidential MicroStrategy documents.

The U.S. District Court for the Eastern District of Virginia found Business Objects guilty of misappropriating MicroStrategy trade secrets and slapped a cease and desist order on the San Jose, Calif., company in the wake of an October 2003 trial.

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 BI space after acquiring Crystal Decisions last year for $820 million.

Business Objects colored the trade secret enjoinment in a 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.

"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."

Though pleased with the court's decision, Mclean, Va.'s, MicroStrategy took exception to Business Objects' claim of victory and accused the company of trivializing its culpability.

"Business Objects misappropriated our trade secrets, and the court issued an injunction prohibiting their use," said Jonathan F. Klein, MicroStrategy's Vice President, Law & General Counsel. "Business Objects' suggestion that its misconduct involved only a single employee and two documents is contradicted by the court's extensive factual findings."

MicroStrategy went on to note that the court had documented a pattern of unethical and improper conduct by Business Objects employees in the October 2003 trial.

"Business Objects acquired constructive or actual access to a significant amount of MicroStrategy's proprietary and confidential information, including internal e-mail, descriptions of software architecture, sales documents, competitive intelligence, and PowerPoint presentations," the court said in a 61-page opinion.

The news ends the litigation in Virginia. The companies continue to slug it out in a Delware federal court over additional patent infringement cases MicroStrategy has levied against Business Objects.