HR software vendor Softscape sued rival SuccessFactors on Thursday, June 5,
adding a twist to the companies’ legal spat and effectively stealing some of the
thunder from SuccessFactors’ user conference this week.
Wayland, Massachusetts-based Softscape accused San Mateo, California-based
SuccessFactors of “deceptive and unlawful conduct” to gain detailed proprietary
information on Softscape’s software products. The suit, filed in the Middlesex
Superior Court in Massachusetts, alleges misappropriation of trade secrets,
“tortious interference with contractual relations” and unfair competition. It
seeks unspecified damages.
Softscape says it has information showing that SuccessFactors accessed
Softscape’s confidential and secure computer systems from an address it alleges
is registered to SuccessFactors.
That claim echoes charges from SuccessFactors in a suit filed earlier this
year that Softscape illegally accessed SuccessFactors’ computer networks.
In a statement Thursday, SuccessFactors called Softscape’s suit a
diversion.
“Softscape’s recent complaint is a transparent and groundless attempt to
muddy the waters to divert attention from their own well-documented illegal and
reprehensible conduct,” SuccessFactors said in the statement. “Their claims are
vague and unsupported by facts, which suggests to us they have no legitimate
basis.”
In March, SuccessFactors sued Softscape, accusing it of false advertising,
unfair competition and other misdeeds associated with the circulation of a
PowerPoint presentation highly critical of SuccessFactors. Softscape has said it
authored the document, but it was only for internal use.
In late March the court issued a preliminary injunction that, among other
things, bars Softscape from disseminating or “affirming the purported truth or
accuracy of” the presentation.
SuccessFactors and Softscape are competitors in the fast-growing field of
talent management software—tools for key HR tasks such as recruiting and
employee performance management.
SuccessFactors is the more prominent of the two firms. It raised more than
$100 million in an initial public offering last year and is led by Lars
Dalgaard, the brash Denmark-born chief executive who speaks about his firm’s
vision of transforming the workplace in grand terms.
“This is a revolution,” he told attendees at the close of the SuccessConnect
conference Thursday in San Francisco.
At last year’s company conference in New York, SuccessFactors featured
business icon Jack Welch as a speaker. This year’s event, held at the upscale
Westin St. Francis hotel, also featured industry luminaries. Robert Sutton, a
Stanford University professor and author of the acclaimed book The No Asshole
Rule, gave one keynote address, as did University of Pennsylvania professor and
author Peter Cappelli.
SuccessFactors customer and conference attendee Daniel Miller had not heard
of the new Softscape suit. But Miller, who is vice president of HR systems and
technology at media giant News Corp., said legal disputes among vendors don’t do
customers any good.
“Nobody wants to be around that drama,” he said.
The “drama” between Softscape and SuccessFactors dates to before the
litigation this year. Softscape sued SuccessFactors in 2005 in connection with a
former Softscape employee joining SuccessFactors.
According to Softscape’s newly filed complaint, that earlier suit resulted in
a settlement in which both companies agreed not to solicit each other’s
employees for a six-month period that began in June 2007. But SuccessFactors
continued to “target Softscape employees” within that period, the Softscape suit
alleges.
—Ed Frauenheim