Infor, customer head to court over third-party system support

IDG News Service - A longtime user of Infor's ERP (enterprise resource planning) software says in a federal lawsuit that Infor is unjustly demanding a substantial sum of money after discovering that third-party companies have been accessing the software.

Micromatic, a Berne, Indiana, manufacturer of rotary actuators and automated assembly equipment, voluntarily submitted to a software license audit by Infor in June, according to a lawsuit it filed against Infor last month in Adams County Circuit Court in Indiana. Micromatic has used Infor's Baan application, now known as LN, since 1994.

An Infor official subsequently contacted Micromatic, saying that the access of its software by Bytecafe Consulting and E-Ventus was in violation of the license agreement. Bytecafe is a managed service provider and E-Ventus offers a supply chain portal as well as Baan/LN consulting services.

Micromatic told Infor the third-party vendors were hired "solely for purposes of maintaining Micromatic's own computer systems, and were not using the software."

But Infor demanded that Micromatic sign an additional agreement for a "third party access fee," the suit adds.

"After nearly 20 years of use of the software in question -- for which Micromatic has paid substantial initial and annual license fees -- Infor now claims that Micromatic somehow owes $131,040 in additional license fees," states the complaint.

Infor's claim "appears to be part of a pattern" meant to "extract additional revenue from customers and former customers on baseless legal grounds," it adds.

That passage may refer to a similar lawsuit between Infor and 3M, where potentially millions of dollars was at stake. That case was dismissed last month upon the agreement of both companies, according to court records.

Meanwhile, Micromatic's court action asks for a declaratory judgment exonerating it against Infor's claims.

Last week, Infor filed its own lawsuit against Micromatic, which repeats the allegations of wrongful third-party usage.

It cites language from the companies' license agreement in which Micromatic agreed it would "not disclose, divulge, make available or permit Use of the software by any third party" without getting written permission from Infor first.

The suit also raises other claims, including that Infor's software had been illegally copied and that Micromatic had granted a contractor unauthorized access to Infor's support system.

The suit, filed Sept. 21 in U.S. District Court for the Northern District of Indiana, states that Infor will terminate Micromatic's license rights within 15 days and demand the return of the software if the alleged license breaches aren't resolved.

Correction: The story has been changed since it was originally posted to correct the dollar amount that Micromatic claims Infor is seeking in additional license fees from $131,040,000 to $131,040.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com