SAP/Ariba and Coupa Patent Case Adds Another Element

The Ariba/Coupa patent case (now the SAP/Ariba and Coupa patent case) continues to work its way through the system. But today saw another element added to it, with Law360 reporting that Ariba has alleged that Coupa stole trade secrets.

The story, Rival Stole Trade Secrets On Top Of Copying IP, Ariba Says (free registration required), reports that SAP and Ariba have “urged a California federal judge on Wednesday to allow it to add trade secrets theft and breach of contract claims to its lawsuit accusing rival Coupa Software Inc. of infringing a patent on e-procurement software, arguing that newly obtained evidence backs the allegations." The alleged evidence was a part of “confidential documents among 70,000 pages of material Coupa turned over in October.”

The Law360 article reports that a number of employees had access to the information, including two former Ariba employees.

Spend Matters research into sales and marketing practices in the procurement technology market suggest that it is common for employees of one provider to depart a current employer and move to a rival vendor (enforcing non-competes is all but impossible, in many cases – if and when they exist). Coupa no doubt has (and has had) numerous employees beyond two referenced individuals who came from Ariba (and SAP). It is common practice for individuals to bring material from one provider to the next (though confidential information that was shared by any employee could open up potential liability).

However, it is important to note it is common practice for vendors to mark documents as confidential. For example, this document pertaining to the Fieldglass acquisition is marked as such yet is in the public domain. Spend Matters believes the degree of confidentiality of particular documents will be a deciding factor here. There are certain documents that are clearly confidential and those that are marked as such but by practice, based on where they are shared (or general distribution outside a company, e.g., to customers, channels and prospects), are not.

No doubt, the lawyers will each have their arguments here, and there’s simply not been enough information disclosed to the public as part of the case to know whether, based on legal definition, the documents were “confidential.”

SAP and Coupa spokesmen declined to provide information to Spend Matters citing policies not to comment on pending litigation.

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  1. Kevin Potts:

    Doesn’t Ariba see that this legal tactic will backfire? It only validates that Coupa is eating its lunch in the market. Why else choose this path? Plus it gives Coupa customers a reason to rally behind Coupa and help it succeed all the more. Remember when Ariba sued Emptoris…and won? This legal victory ended up pyrrhic. Emptoris bounced right back with a new investor (Marlin Private Equity) and the resources and will to up its game. Nice to see investors continuing to bet on Coupa. Marlin Private Equity made (probably) their best return ever by betting on Emptoris despite Ariba’s court victory.

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