Wellogix sues SAP for trade secrets misappropriation

Wellogix, a software company serving the oil and gas industry, sued Accenture in a Texas court for misappropriation of trade secrets, and won. Accenture appealed the decision, and Judge Keith Ellison (Case 3:08-cv-00119 Document 334 Filed in TXSD on 10/14/11) denied Accenture’s Rule 50(b) petition and modified the jury’s exemplary damages award. In their appeal, Accenture argued that “Wellogix failed to rule out the possibility that its loss in value was due to SAP’s access and potential misappropriation” rather than Accenture’s actions. Not that they needed to be spurred on, but now Wellogix is accusing SAP of stealing its trade secrets, in effect, putting it out of business. (It’s unknown how such finger-pointing sits with Accenture’s clients.)

Here’s the sequence: In 1999, BP America hired Accenture to help with some sophisticated processes (procure-to-pay) and Accenture recommended Wellogix as a vendor. In early 2002, BP and Welllogix signed a software and services agreement, and at the same time (a jury determined) Accenture passed along Wellogix trade secrets to SAP.

In March of 2005, SAP and Wellogix signed a partnership agreement, with each party retaining original full IP rights. The complaint alleges SAP then visited the offices of Wellogix, ostensibly to perform due diligence, all of which eventually led to SAP incorporating what they learned into SAP software, and Accenture, BP and others chose to implement SAP with the new-substitute-for-Wellogix solution, in effect shutting out their new partner.

Wellogix undoubtedly learned from their courtroom success against Accenture, and, of course, Accenture gave a wink and a nod towards SAP as a possible ill-doer. The valuations Wellogix relied upon for the Accenture litigation should serve them well in this one (see a more in-depth discussion of the trade secrets issues in IP Management & Valuation, Vol. 1, Issue 3).