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Lawsuit alleges cloak-and-dagger conspiracy by Software AG

By Chris Kanaracus
March 25, 2011 03:36 PM ET

IDG News Service - Middleware giant Software AG conducted an elaborate corporate espionage scheme replete with "sex, lies and an audiotape," according to allegations in a lawsuit filed by RFID (radio frequency identification) vendor GlobeRanger.

GlobeRanger, of Richardson, Texas, "poured a decade of work and tens of millions of dollars into developing technology that is truly transformative and promised to exponentially facilitate the flow of goods and information throughout the world," according to its complaint, which was originally filed in a Dallas County, Texas, court in December and moved to federal court this month.

Software AG, which dwarfs GlobeRanger in size, "had an irresistible motive," the complaint adds. "It stood to make hundreds of millions of dollars from stealing GlobeRanger's technology and attaching it to a product already deployed in tens of thousands of companies worldwide."

RFID technology is not new, GlobeRanger's complaint notes. But its platform is "a true chameleon" that can be deployed in any enterprise within two to three months, it claims.

Its products are used to track crime scene evidence in Holland and monitor the removal of hazardous materials from a Tennessee nuclear site, the complaint states. It even "knows just where 'your dollop of Daisy' sour cream is between farm and market."

GlobeRanger has also won contracts making it "the enterprise standard" for the U.S. Defense Logistics Agency and the U.S. Air Force, according to the complaint.

Software AG's April 2007 purchase of middleware vendor WebMethods for $546 million is at the root of the conspiracy alleged in GlobeRanger's filing.

"WebMethods was worth so much because it is literally everywhere -- in every industry, every sized enterprise," the complaint states. An integration between RFID technology and WebMethods would constitute a "holy grail" and a "massive home run" for Software AG, it adds.

However, WebMethods was not developed with RFID in mind, according to the complaint.

Now with WebMethods in hand, it would be years before Software AG could develop a viable RFID product, leading the company to make a brazen move, according to the complaint.

"Software AG had just spent a half a billion dollars. It had to show returns on this investment," it states. "Software AG decided that it would develop an RFID Solution through corporate espionage."

GlobeRanger's complaint also names two systems integrators it had worked with, Main Sail and Naniq Systems, as defendants.

A director at Naniq, Kim Gray, "was unusually successful" at winning contracts from the Navy's Automatic Identification Technology Office, according to the complaint, which said, "She was also having an improper relationship with Bob Bacon, the married head of Navy AIT." Gray was also "involved with a man at Software AG," it alleges.

Reprinted with permission from Story copyright 2014 International Data Group. All rights reserved.
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