In a recent decision, a federal court ruled in favor of Austin based software developer, Versata Software, in holding Ford Motor Company liable for stealing trade secrets – more delicately referred to as misappropriation. However, if it looks and quacks like theft – it is.
As an Austin Software Attorney with a focus on Texas Trade Secret misappropriation and theft, I applaud this decision.
Versata had entered into a 15-year contract with Ford allowing for the use of its software which facilitated the assembly process. Near the end of the agreement, Ford terminated the agreement informing Versata that it had developed its own software.
Well – that was true, but they left out the part where Ford had the audacity to reverse engineer the software and use it as a competitive product. At trial, one of the parties recounted that he felt like Versata was “stabbed in the back”. He was right. The jury agreed and awarded Versata $104.6 Million.
There is a lesson in this favorable disposition for all software developers in Austin and elsewhere. Always protect your software and assume that any party utilizing your trade secrets will ultimately attempt to steal it. As an Austin Trade Secret Attorney, I have seen this over and over again.
To ensure that your company is on the winning side of software theft and misappropriation battle, consider the following Intellectual Property recommendations:
1. Protect your Software!
This sounds like a non-brainer, but clients repeatedly fail to take the most basic steps to protect their software. I see this all the time, which is why we’re hired in the first place!
I always recommend the “belt and suspender” IP protection of software copyright and patent. That is the only way to protect your investment from attack.
The U.S. Copyright Office allows for the copyright of software in a way which protects against reverse engineering. The rules permit the filing of redacted software and just a few pages from the entire code. The clients perform the redaction themselves in such a way that no one can reverse engineer in the absence of ESP.
A patent is also recommended as that provides the most comprehensive IP protection and is expected in the industry as “best practices”. If your goal is to protect your software from any and all threats and to increase its value and marketability – the patent process is the way to go. Keep in mind that if a larger company seeks to acquire your company or IP, it will expect that it has been patented as part of the due diligence process.
2. Make sure your software is TUTSA compliant.
If you never heard of TUTSA, you need to consult an IP attorney ASAP! The Texas Uniform Trade Secret Act or TUTSA is a relatively new law which grants special rights of protection to software developers which makes it easier to go after IP vultures, scavengers, and low life’s, by getting an injunction with just a simple showing that misappropriation is “suspected”. That is a very low bar to meet and great news for software companies.
3. Have an IP Software Protection Protocol in Place.
This is essential and easy to implement with the assistance of sophisticated Austin software counsel. To comply with TUTSA, there needs to be special access protections in place complemented by restrictions in your employment agreements. If this sounds brand new to you, you are most likely Not TUTSA compliant!
At the Moster Law Firm we are immediately equipped to counsel software developers on the steps necessary to protect their software. Our Turing Technology Group includes patent attorneys, electrical engineers, and programmers who are there to help.
Give us a call.