Emptoris and Ariba -- The Final Judgment is Complete
Update 1:35 PM CST: According to an Ariba Press release posted twenty minutes ago, "The Court also ordered Emptoris to pay Ariba’s costs incurred during the suit, which have not yet been calculated." I have heard from other sources that Emptoris will not have to pay Ariba's legal costs. Clearly, there are some nuances around this point that have not entirely surfaced yet or that are eluding me. In addition, an Ariba spokesman claimed in same release that "we expect that the court's injunction will make it plain that [the] infringing functions must be completely removed by Emptoris and cannot be included in any future offerings" which might suggest a judge could rule a patch or work-around insufficient.
Earlier today, a judge issued his final award settlement in the Ariba / Emptoris patent litigation case. Based on the finding of willful infringement of one of the patents in question, it looks like Emptoris will owe an additional $1.5 million (give or take) in penalties plus interest unless they choose to appeal. This amount was based on an enhanced judgment on one of the patents and is in addition to the approximate $5 million already awarded. So in total, Emptoris is on the hook for $6.5 million. While this may sound like a large number, Emptoris faced a significantly higher bogey hanging over its head in the form of a larger ruling and the prospect of being forced to pay Ariba's legal fees (which they are not responsible for under this final ruling). This could have brought the potential liability to in excess of $20 million. So one could argue that they actually got off fairly well.
But "well" is a relative statement. After reading the case and a cursory glance at the judgment numbers, it looks like the only parties who really profited on a cash basis were the attorneys. It appears like Ariba spent somewhere the mid/high seven to possible low eight figures on this litigation which might have accounted for a material -- if not the entire -- portion of the final judgment (maybe even more). Emptoris probably spent a number in the same league. From a marketing perspective, Ariba has gained the bragging rights to saying they defeated a chest-thumping opponent in court (which, I’ll admit, must feel especially good given how much Emptoris taunted Ariba over the years in downright childish press releases and through field FUD). But at the same time, I also know that Ariba has offended the sensibilities of at least some customers (not to mention Emptoris customers).
So net, net maybe Ariba’s won something. And it’s clear without question that Emptoris has come out a loser in this litigation. But the only clear victors are the lawyers. As Michael Corleone said in one of the Godfathers, "I don't need tough guys. I need more lawyers." In the case of Ariba, one wonders whether a few dozen additional tough guy developers would have been a better long-term investment than lawyers. Who knows. But more important, who am I to doubt the Don? Or Bob, for that matter ...
Need the full scoop on the case? Check out the following posts in the Ariba/Emptoris patent soap opera:
The Emptoris Sourcing Patch -- What it Means for Users
A Few Additional Thoughts on the Emptoris/Ariba Patent Settlement
Ariba Prevails in Patent Litigation Against Emptoris
Ariba Files Patent Infringement Suit Against Emptoris
- Jason Busch
As I understand, this is all over some little piece of software code that does not provide any type of competitive advantage to begin with. Its nothing unique. So where's the beef?
This type of thing ticks me off as a buyer of these types of technologies. The cost eventually gets passed to me. If not in dollars than in FUD.
And who ever wants to give the lawyers any more money? Someday every other person in this country is going to have to be a lawyer.
There's "competition" and there's "copy-tition." Competition should be encouraged. Copy-tition should be discouraged.
There's nothing wrong with entering a market to go head-to-head with an innovator. But when you copy their intellectual property - even if it's minor - it is wrong.
Unfortunately, the legal system is the recourse. Really, how else is an innovator to convince a competitor to stop copying?
A friendly phone call? Yeah, right.
A cease and desist letter? Suuuure.
So the most common alternatives are to sue someone or let them get away with it. Even though I'm not a fan of situations where the attorneys are the only winners, I give credit to the companies that vigorously defend their intellectual property and say "We're not gonna take it!"
Ooh, cue the drums...
http://www.youtube.com/watch?v=ek1A7g824PU
I too am glad to see Ariba bit the bullet on this one, spending in excess of $15 or 16 million for litigation. For what, to defend a "bid overtime ceiling" function that Emptoris says it does not even use? I cant figure out all the legal back and forth in these releases, but even reading Ariba's own press release on this the functionality sounds minor.
As for Empotoris, I am sure they are not happy to have to pay, what is it, $6 million, but for a software company their size or Ariba's size this isn't anything that will really impact their operations, its just an annoyance that slaps the investors and customers of both companies.
I agree, protect critical intellectual property, but lawsuits in the software industry havre gotten out of control.
As someone noted, this venue, the Texas court, is known to be friendly to those who bring patent suits. Who knows if this thing will even hold up on appeal. I assume it will be appealed by Emptoris. Then what, Ariba spends $20 plus million and gets nothing? Who benefits?
Send lawyers, software and money.
I agree that there's a difference between "copy-tition" and "competition", and that the first should be defended when a company's livelihood is in jeopardy, but I am unaware of a single patent in this space that doesn't either patent common business processes, obvious extensions to business processes, or "rules" that are essentially mathematical algorithms, all of which are supposed to be unpatentable (and would be if the patent office wasn't staffed with people thoroughly unqualified to review the patents put before them everyday, which is the case because no one qualified to actually review the patents -- knowledgeable about the space, its history, and prior work -- would actually want the job)! That's why I'm against software process patents and business process patents and think the US should follow the lead of the EU and just kill them.
After all, if a competitor outright copys your software product, you can still sue them under copyright, violation of trade secrets, corporate espionage, etc.
But more importantly, you need to get with the times! This is the link you want:
http://www.livevideo.com/video/darkearthrising/978...
(scroll down two pages to see the video)
However, it makes me question Ariba's own viability. Yes, they have millions on hand, but in case if you haven't noticed, they are losing cash and spending dlike a drunken sailor.
Again, my only point is that this type of litigation is not good for anyone, except the lawyers, and its hurting the software industry. I agree with the Doctor, Congress needs to do something about it.
http://www.emptoris.com/newsroom/pressreleases/new...
The Court has rejected Ariba's motion for review of the Emptoris "patch" effectively concluding the trial.