Lands' End, software vendor at contract impasse after 20-year relationship
An analyst says the companies' legal dispute over key software contract language contains an important lesson for all buyers
IDG News Service - Lands' End is at legal loggerheads with its longtime payroll software vendor over how much longer the clothier can lawfully use the application, with $1 million in potential fees hanging in the balance.
Lands' End signed a 20-year contract with Genesys Software Systems in January 1993, but the software didn't go live until Oct. 28 of that year, according to its complaint filed this week in U.S. District Court for the Western District of Wisconsin. Genesys was acquired by PeopleStrategy in 2010.
Now Lands' End is moving to another software vendor, and in August "reached out to Genesys to attempt to clarify and, if necessary, extend the license to cover the expected transition period."
Early discussions were "productive" but Genesys later broke off talks, according to the complaint. On Jan. 9, the two companies held a conference call during which Genesys officials said that Lands' End's license would be terminated on Jan. 19.
In addition, "reneging on previous offers, informed Lands' End that it only would extend the license if Lands' End paid Genesys approximately $1 million," according to the complaint.
That was apparently because Genesys' licensing policy had changed sometime during the companies' 20-year relationship.
"We no longer offer term licenses, but our perpetual license is currently priced at $999,950," wrote Colin Macdonald, director of finance at PeopleStrategy, in an email to Lands' End dated Jan. 9. Lands' End included the email in its court filing.
Genesys attorneys sent Lands' End a letter on Jan. 14, demanding that it uninstall the software and "send written certification of these activities" by the end of Jan. 19, the complaint adds. Genesys also "threatened to seek a temporary restraining order and all fees in connection with such action if Lands' End does not comply with these demands."
Lands' End, however, is maintaining that it has the right to keep using Genesys' software until Oct. 28 of this year, which would be 20 years after the go-live date, not the effective date of the agreement. "The License Agreement provides for twenty years of 'use' of the Genesys Software," the complaint states.
"For Lands' End to prematurely cease using the Genesys software and to expedite its transition to a new software vendor would cause Lands' End considerable and unnecessary damage and expense," it adds. Lands' End is asking the court for a declaratory judgment stating that it has the right to continue using the software and that the license term doesn't expire until Oct. 28.
PeopleStrategy didn't immediately respond to a request for comment Friday. As of Friday, it had not filed a response to Lands' End's complaint.
- 15 Non-Certified IT Skills Growing in Demand
- How 19 Tech Titans Target Healthcare
- Twitter Suffering From Growing Pains (and Facebook Comparisons)
- Agile Comes to Data Integration
- Slideshow: 7 security mistakes people make with their mobile device
- iOS vs. Android: Which is more secure?
- 11 sure signs you've been hacked
- Pay-as-you-Grow Data Protection: IBM Tivoli's Full-featured Data Protection Suite for Small to Medium Businesses IBM Tivoli Storage Manager Suite for Unified Recovery gives small and medium businesses the opportunity to start out with only the individual solutions...
- Streamline Data Protection with IBM Tivoli Storage Manager Operations Center IBM Tivoli Storage Manager (TSM) has been an industry-standard data protection solution for two decades. But, where most competitors focus exclusively on Backup...
- Simplify and Consolidate Data Protection for Better Business Results Learn about IBM® Tivoli® Storage Manager Operations Center, which provides advanced visualization, built-in analytics and integrated workflow automation features that leapfrog traditional backup...
- HP HAVEn: See the big picture in Big Data HP HAVEn is the industry's first comprehensive, scalable, open, and secure platform for Big Data. Enterprises are drowning in a sea of data...
- Meg Whitman presents Unlocking IT with Big Data During this Web Event you will hear Meg Whitman, President and CEO, HP discuss HAVEn - the #1 Big Data platform, as well...
- The New Way to Work Knowledge Vault This Knowledge Vault focuses on how, in today's increasingly virtual world, it's more important than ever to engage deeply with employees, suppliers, partners,... All Legal White Papers | Webcasts