InstallShield sues competitor Wise Solutions for electronic espionage

The lawsuit alleges that Wise gained access to confidential InstallShield files

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InstallShield Software Corp. has filed a lawsuit against Wise Solutions Inc., alleging that the company engaged in electronic espionage on at least 903 occasions.

Schaumburg, Ill.-based InstallShield, which filed the suit on June 27 in the U.S. District Court for the Northern District of Illinois, Eastern Division, in Chicago, is asking for unspecified damages, according to Tyler Sheffield, the company's chief financial officer.

Both InstallShield and Plymouth, Mich.-based Wise Solutions develop and sell tools to software development companies.

Sheffield said the U.S. attorney's office and the FBI are in the midst of their investigation into Wise's allegedly illegal activities, and he isn't sure when, or if, a criminal complaint will be filed. The U.S. attorney's office for the Northern District of Illinois couldn't be reached for comment.

In its civil complaint, InstallShield contends that it discovered information indicating that from July 1, 2002, through June 23, 2003, Wise obtained access to InstallShield's file transfer protocol (FTP) server using the usernames and passwords of two InstallShield employees, as well as with an "anonymous" account. Sheffield said neither InstallShield nor law enforcement officials believe that the two employees were involved with Wise's activities.

Using the confidential usernames and passwords of the two InstallShield employees, Wise allegedly downloaded 903 files -- many containing proprietary and confidential information, including two mailing lists containing the business names, individual contact names and addresses of 109,900 InstallShield customers and prospects.

"We match up very closely as competitors, so it's a gold mine for [Wise] to get access to this," Sheffield said.

"Wise has a reputation of honesty and integrity, and nothing like this has every happened before in our history," said Pat Ziarnik, Wise's chief legal counsel. "We know for a fact that their customer list was publicly available -- we determined that through a forensic investigation -- but we are conducting an internal investigation to see what happened."

InstallShield spokeswoman Ariana Nikitas disagreed, saying that according to the FTP log included with the company's complaint, Wise accessed the customer list with the username and password of one of InstallShield's employees. "According to that information, our customer list was not publicly available," she said.

In addition, Wise allegedly obtained unauthorized assess to and downloaded InstallShield's confidential advertising and marketing materials, then used that information to create an almost identical ad campaign, according to the complaint.

Sheffield and Ziarnik said Wise agreed to an injunction prohibiting it from engaging in these activities until the matter is resolved in court.

Sheffield said a court date hasn't yet been set.

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