Thursday, May 22, 2008

Razorsight Forks out $4.5M to Settle TEOCO Suit

Razorsight Corp. will pay $4.5 million to rival TEOCO Corp. to end a patent infringement lawsuit.

The settlement, announced yesterday, comes approximately nine months after TEOCO accused Razorsight and its founder of stealing intellectual property. Another, unnamed defendant was included in the suit. Razorsight said on Wednesday it chose to settle as “purely a business decision.”

“It would’ve cost us another $2.5 million to go all the way to trial, and although we were confident of our prospects at a trial, we really wanted to put this behind us,” said Razorsight CEO Charlie Thomas. “The settlement was an economic decision on behalf of senior management and our investors and eliminates a huge distraction.”

The $4.5 million, Thomas added, “amounts to a single customer contract for Razorsight.”

Razorsight said none of its customers has been, or will be, affected by the suit; executives also said the billing and OSS company isn’t licensing any technology from TEOCO, nor paying any royalties.

“We continue to have unfettered rights to sell our full portfolio of solutions in the marketplace,” Thomas said.

For its part, TEOCO said the federal court handling the case has barred Razorsight from further using TEOCO intellectual property; Razorsight must remove TEOCO’s technology from its systems by Sept. 1, 2008, TEOCO said. The settlement also includes a future audit.

"We have built our business and reputation on ethics and integrity in the marketplace,” said Atul Jain, TEOCO chairman and CEO. “We felt this action was necessary to protect the intellectual property we develop to serve our valued customers and we believe that justice has been served."

The suit arose after Sundeep Sanghavi left TEOCO to start Razorsight. At first, Thomas said, the two companies shared a “positive, joint marketing relationship” – that is, until they started competing in 2003. Then, in mid-2007, TEOCO said it was “made aware” that Razorsight was using its intellectual property. It filed suit in September and the discovery process revealed even more infringement than initially believed, TEOCO said in a statement; TEOCO filed more claims against Razorsight after that.

No comments: