The Suffolk Superior Court in Massachusetts will soon decide if software vendor Netezza should be allowed to continue selling a product used by the CIA in its Predator drone program that another vendor claims is based on misappropriated technology.
The disputed Netezza technology was originally developed for and is currently integrated in targeting systems used by Predator drones in antiterrorist operations in Afghanistan, Iraq and elsewhere. It is also used in Netezza's Spatial technology, which the company started selling earlier this year.
Intelligent Integration Systems (IISi), a relatively small vendor of data analytics software, claims that Netezza stole its trade secrets and intellectual property (IP) in building the system for the CIA.
The company is seeking a court order that would bar Netezza from using and reselling the disputed technologies.
In its motion seeking a preliminary injunction, IISi accused Netezza of secretly reverse-engineering IISi's technology and of knowingly selling a seriously flawed "hack" of the original software to the CIA.
A hearing on IISi's motion is slated for Dec. 7. However, in light of IBM's pending acquisition of Netezza, a court hearing could well be scheduled sooner, a source close to the case said.
The dispute in question goes back to a 2008 agreement between the two companies under which Netezza obtained the right to use and distribute a geospatial tool kit and an extended SQL tool kit developed by IISi. The terms of the agreement required IISi to support the tool kits and allowed Netezza to eventually acquire ownership of the technology.
According to IISi, the agreement applied only to Netezza's use of the two products on the Netezza Performance Server (NPS). Netezza, however, asserted that the agreement required IISi to support the technology on its new TwinFin data warehouse technology as well.
According to court documents, in the spring of 2009, Netezza started asking IISi to tweak its geospatial and extended SQL tool kits so it would run on the Netezza TwinFin. IISi originally agreed to consider the request but later balked when Netezza started insisting that it wanted the job done on an accelerated schedule.
IISi maintained that it needed time to develop and test a version of its tool kits for the TwinFin because of how different the new product was from the earlier NPS technology. But Netezza kept demanding that IISi deliver "accelerated, incremental versions" of the geospatial technology for the TwinFin for "national security reasons" and because its customer (later identified as the CIA) was willing to accept the code "progressively."
The differences eventually led to Netezza breaking its relationship with IISi and filing a lawsuit against the company for breach of contract last November.
Netezza claimed that IISi had failed to live up to its contractual obligations by refusing to develop the geospatial tool kit for the TwinFin. The company claimed that it was entitled to the disputed technology under the terms of its agreement with IISi.
IISi promptly filed a counterclaim disputing Netezza's assertions and charging the company with misappropriating its trade secrets. The company claimed that Netezza had secretly modified the install scripts on IISi's Geospatial product and ported the Extended SQL tool kits to TwinFin and then sold that to the CIA as its own technology.
IISi claimed that Netezza had sold its first TwinFin featuring the allegedly misappropriated technology to the CIA one month before it terminated its agreement with IISi.
In August, Superior Court Judge Margaret Hinkle ruled that Netezza did not have good cause to terminate its agreement with IISi. The court will now have to rule on IISi's motion to stop Netezza from selling products that IISi claims are based on its technologies.
Meanwhile, IBM, which is awaiting approval of its planned purchase of Netezza, will be barred from having access to the disputed technology until a court resolves the issue, the source said today.
Netezza did not respond to a request for comment. In a conversation with Computerworld today, Paul Davis, the CEO of IISi, confirmed the chronology of events but said he could not comment on other aspects of the case.
News of the dispute between Netezza and IISi was first reported by TheStreet.com. Since then the story has remained largely under the news radar despite being picked up by a few media outlets.
In August, Narco News, an online investigative news site, published a detailed description of the case and posted several court documents and e-mail exchanges between executives from both companies highlighting their differences.
Jaikumar Vijayan covers data security and privacy issues, financial services security and e-voting for Computerworld. Follow Jaikumar on Twitter at @jaivijayan or subscribe to Jaikumar's RSS feed . His e-mail address is firstname.lastname@example.org.