Shields Legal successfully thwarted a “shock and awe” litigation campaign initiated by a private equity-backed software company claiming to own the rights to our client’s software.

Our client was a successful commercial software developer. Several years earlier, the client briefly had entertained discussions with a competing software company about integrating software solutions. During the course of discussions, and without a formal confidentiality agreement or NDA in place, our client and the competing software company shared with each other the exciting features of their respective software products. The talks were abandoned. During the years that followed, our client continued to develop enhancements to its excellent software product, and its business grew as a result. Some of the growth came from former customers of the competing software company.

Introduction

While software development is rife with competition, some strategic entrepreneurs seek synergistic opportunities over use of cutthroat competitive tactics. Shields Legal’s client offered a software solution that was compatible with the product of a competing software company. After integration talks were abandoned, our client’s software business continued to grow, including attracting customers of the competing software company. When the competing software company could no longer keep up in the marketplace, it turned to the courthouse for a solution to its lackluster performance.

Problem

The competing software company, sensing an opportunity to extinguish a successful and growing startup, filed suit in Texas state court, seeking not only monetary relief but emergency and permanent injunctive relief. The competitor brought claims of trade secret misappropriation, alleging that our software developer client had stolen, and incorporated trade secret information shared during the integration talks into its software product.

The competitor’s emergency first application for temporary restraining order was denied, a hard-won victory given the short timeline. The state court allowed the competitor to conduct voluminous expedited written and deposition discovery. Shields Legal won another victory for our client when the court denied the competitor’s second application for a temporary restraining order. Anticipating an adverse ruling on its request for a temporary injunction, the competitor dismissed its state court case. Unbeknownst to Shields Legal and our client, the competitor had applied for copyright registration of our client’s software product and refiled its suit in federal court, alleging copyright infringement.

Solution

The competing software company learned the hard way that Shields Legal leverages every opponent’s tactical decision into an opportunity to achieve a successful outcome for our clients. Our litigation team procured dismissal of the federal court case by establishing that (i) the features of the competing software company’s software product were not protectable, and (2) the competing software company effectively gave away their alleged trade secret information when they engaged in the integration talks without an NDA or other confidentiality protection in place.

Conclusion

At the core of Shields Legal’s advocacy for our clients is our commitment to the truth and safeguarding our clients’ business interests. Here, our team investigated and organized the facts and applied state and federal law to demonstrate the truth behind the competitor’s allegations. Two courts in Texas recognized the truth, ultimately leaving the competitor no alternative but to settle with our client.