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Infosys gets partial relief in Versata lawsuit

US court drops many of Versata's claims, accepts Infy's motion for summary judgment

Itika Sharma Punit  |  Bangalore 

Infosys has received partial relief in a lawsuit that was filed against the Bangalore-headquartered company by Versata Software three years ago in a US court. In a summary judgement issued earlier this month, a Texas district court dropped some parts of the claims made by the US-based information technology firm.

Versata had filed a breach of contract suit alleging Infosys stole the confidential source code of its business software and used it to create a competing product. The court said several of Versata’s claims were pre-empted by copyright infringement laws.

The court also granted Infosys’ motion for summary judgement against Versata on claims of breach of contract, tortious interference with contract and unjust enrichment.

However, the judgement kept alive certain other charges such as misappropriation of trade secret, flouting Texas Theft Liability Act, unfair competition, and common law misappropriation.

Summary judgement is a procedure used during civil litigation to expeditiously dispose of a case without a trial, especially in cases where there is no dispute on the material facts of the case and a party is entitled to judgement as a Matter of Law. When contacted by Business Standard, Infosys declined to comment on the matter. The case dates back to October 2010 when Versata had sued Infosys for eight distinct causes of action arising from the Indian IT major’s conduct at a third-party client - Ameriprise Financial Inc, the financial-services arm of American Express.

Versata had claimed it had entered into a technology licence agreement with Infosys in 2003, which allowed the Indian firm to use Versata’s confidential technology for providing services to certain ‘approved’ third parties in exchange for a royalty. The pact barred Infosys from copying or reverse-engineering the data, Versata had said in its original complaint.

However, according to Versata's claims, Infosys in 2008 provided software maintenance services to Ameriprise Financial, which was not an approved third-party. Additionally, Versata claimed that Infosys employees accessed Versata’s code base at Ameriprise and de-compiled it to create a new code.

While Infosys has received a partial relief, observers are of the view this may not mean the firm is completely off the hook.

“It is a limited victory for Infosys since certain parts of the claim have been dropped. However, the case will still proceed with respect to the claims that survive,” said Apar Gupta, partner at law firm Advani & Co. “Infosys will still have to participate in the trial and this case still does have the potential for a finding of infringement and liability,” he added.

According to Salman Waris, partner at Seth Dua and Associates, a decision-granting summary judgement can be appealed without delay, and “it is possible that Versata would go into appeal”.

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First Published: Fri, September 20 2013. 00:41 IST