DCT

2:15-cv-10628

Versata Software Inc v. Ford Motor Co

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Key Events
Amended Complaint

I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 2:15-cv-10628, E.D. Mich., 01/20/2017
  • Venue Allegations: Venue is alleged as proper in the Eastern District of Michigan, where Plaintiff Ford Motor Company maintains its principal place of business and where key meetings between the parties allegedly occurred.
  • Core Dispute: Plaintiff seeks a declaratory judgment that its internally developed "PDO" vehicle configuration software does not infringe three of Defendant's patents related to software-based product configuration systems.
  • Technical Context: The technology concerns complex software for managing and validating the vast number of possible configurations for customizable products, such as automobiles with numerous interdependent components and options.
  • Key Procedural History: This declaratory judgment action arises from a deteriorated business relationship. Plaintiff Ford alleges that after it developed its own "PDO" software to replace Defendant Versata's licensed "ACM" software, Versata threatened patent infringement, asserting that Ford's new software "must infringe" its intellectual property. The complaint also includes a significant count for inequitable conduct, alleging Versata intentionally withheld its own highly material prior art software ("SalesBUILDER") from the U.S. Patent & Trademark Office during the prosecution of the parent patent in the asserted family.

Case Timeline

Date Event
1991-01-01 Versata allegedly began selling its "SalesBUILDER" software
1996-09-03 Priority Date for ’651, ’308, and ’294 Patents
1998-10-01 Ford licensed "SC Config" software from Versata
1998-10-20 ’651 Patent Issued
2002-06-11 ’308 Patent Issued
2004-01-06 ’294 Patent Issued
2004-12-01 Ford and Versata entered into Master Subscription and Services Agreement (MSSA)
2010-01-01 Ford engineers began developing "super configurator" software
2010-11-01 Versata informed Ford that its ACM software was "obsolete"
2011-10-01 Ford filed a patent application on its "super configurator" software
2011-01-01 Ford began development of "PDO" vehicle configuration software
2014-10-07 Versata sent Ford a license termination letter with a list of 86 patents
2014-12-19 Meeting where Versata representative allegedly stated Ford's software "must infringe"
2014-12-23 Versata demanded an audit of Ford's development of its replacement software
2015-01-01 Ford deployed its patented PDO software into production before this date
2017-01-20 Complaint Filing Date

II. Technology and Patent(s)-in-Suit Analysis

U.S. Patent No. 5,825,651 - "Method and Apparatus for Maintaining and Configuring Systems"

Issued: October 20, 1998

The Invention Explained

  • Problem Addressed: The patent's background describes that computer systems for product configuration typically required users to learn and use a complex, syntax-based "configuration language," similar to a programming language, which limited their use to sophisticated data maintainers (Compl. ¶ 136; ’651 Patent, col. 1:26-38).
  • The Patented Solution: The invention proposes a two-part system. First, a "maintenance system" provides a graphical user interface (GUI) that allows a user to define a product and its component relationships using intuitive actions like "drag and drop," thereby creating a product "definition" without needing a specialized language. Second, a "configuration system" uses this definition to interactively validate a customer's selections, ensuring that the current configuration state is always valid (’651 Patent, Abstract; col. 2:38-54; FIG. 2).
  • Technical Importance: This approach aimed to democratize the creation of complex product configuration rules, enabling business users without programming skills to define and maintain systems, thereby reducing training costs and reliance on technical experts (’651 Patent, col. 1:52-60).

Key Claims at a Glance

  • The complaint alleges that Versata’s prior art software practiced independent claims 1 and 60 (Compl. ¶ 148).
  • Independent Claim 1 (Method) Elements:
    • Generating a definition for a system containing one or more elements, conveyed graphically using product relationships that include an "includes classification."
    • Generating a set of part relationships between the elements, conveyed graphically.
    • Configuring the system using the generated definition and relationships.
  • Independent Claim 60 (Method) Elements:
    • Generating a definition for a system with elements and product relationships (e.g., includes, requires choice, optional).
    • Generating part relationships between elements.
    • Receiving input from a configuration user.
    • Validating the input based on the definition, relationships, and current configuration state.
    • Identifying a set of valid configuration options based on that validation.

U.S. Patent No. 6,405,308 - "Method and Apparatus for Maintaining and Configuring Systems"

Issued: June 11, 2002

The Invention Explained

  • Problem Addressed: As a continuation of the '651 Patent, this patent addresses the same problem: existing configuration systems were difficult to use because they required knowledge of a specialized, programming-like configuration language (’308 Patent, col. 1:28-39).
  • The Patented Solution: The patent describes the same conceptual solution of a GUI-based maintenance system for creating a product definition and a configuration system for validating user selections against that definition (’308 Patent, Abstract; col. 2:40-50). The claims are directed to an article of manufacture (i.e., software on a computer-readable medium) that performs the method, including the translation of a user-created hierarchy into an internal representation for efficient processing (’308 Patent, col. 3:1-11).
  • Technical Importance: The invention's importance lies in abstracting the complexity of rule creation away from the user, allowing non-programmers to manage sophisticated product configuration logic through an intuitive graphical interface (’308 Patent, col. 1:52-60).

Key Claims at a Glance

  • The complaint seeks a declaratory judgment of non-infringement for the patent generally. Independent claim 20 is representative of the invention.
  • Independent Claim 20 (Article of Manufacture) Elements:
    • Computer readable program code configured to cause a computer to generate a definition for a system, conveyed graphically with product relationships including an "includes classification."
    • Code to generate a set of part relationships between elements, conveyed graphically.
    • Code to configure the system using the definition and relationships.

U.S. Patent No. 6,675,294 - "Method and Apparatus for Maintaining and Configuring Systems"

Issued: January 6, 2004

Technology Synopsis

As part of the same patent family as the ’651 and ’308 patents, this patent discloses a system for overcoming the limitations of syntax-based configuration languages. The invention uses a GUI-driven maintenance system to define product structures and component interdependencies, which are then employed by a configuration engine to ensure users can only make valid selections (’294 Patent, Abstract; col. 1:12-19).

Asserted Claims

The complaint seeks a declaratory judgment of non-infringement for the patent as a whole, without specifying claims.

Accused Features

Ford alleges its internally developed "PDO" vehicle configuration software does not infringe this patent (Compl. ¶ 71).

III. The Accused Instrumentality

Product Identification

Ford's "PDO" vehicle configuration software (Compl. ¶ 46).

Functionality and Market Context

The PDO software was developed internally by Ford between 2011 and 2014 as a replacement for Versata's "Automotive Configuration Manager" (ACM) software, which Ford had licensed (Compl. ¶ 46). The complaint alleges that the PDO software is based on Ford's own patented "super configurator" technology (covered by U.S. Patent No. 8,812,375) and that it "operates fundamentally differently" from Versata's technology (Compl. ¶¶ 43-46). Ford alleges its PDO software provides significant technical advantages over the ACM software, including higher accuracy, the ability to manage a broader range of related data (e.g., vehicle volumes, weight), and an architecture designed to allow non-expert business users to define configurations directly (Compl. ¶¶ 47-49). Ford claims it was forced to develop and deploy the PDO software due to Versata's business conduct, including termination notices and demands for what Ford characterizes as "extortion"-level license fees (Compl. ¶ 53).

IV. Analysis of Infringement Allegations

The complaint makes a general allegation of non-infringement for the asserted patents but does not provide an element-by-element claim chart or detailed narrative mapping the accused instrumentality to the claim limitations.

  • Identified Points of Contention:
    • Technical Questions: The central dispute appears to be a technical one. Ford alleges its PDO software "operates fundamentally differently" and is based on its own separate, patented invention (Compl. ¶¶ 44-46). This raises the evidentiary question of what specific technical distinctions Ford will present to prove its system does not perform the steps claimed in the Versata patents. The complaint highlights differences in data accuracy, the scope of data management, and the user architecture as potential areas of distinction (Compl. ¶¶ 47-49).
    • Scope Questions: The case may raise questions regarding the scope of the claims in the Versata patents. A court may need to determine whether the claim terms, such as "generating a definition" and "configuring said system," are broad enough to read on Ford's "super configurator" technology, or if the patents are implicitly limited to the specific bit-vector-based implementation detailed in the specification (’651 Patent, col. 9:43-67).

V. Key Claim Terms for Construction

  • The Term: "generating a definition for said system" (from ’651 Patent, Claim 1)
  • Context and Importance: This term is foundational to the claimed invention, describing the output of the "maintenance system" that enables the subsequent "configuration" step. The dispute over whether Ford's PDO software infringes will likely depend on whether its method for allowing users to create configuration rules constitutes "generating a definition" as construed from the patent. Practitioners may focus on this term because Ford alleges its PDO software uses a different architecture that allows non-expert business users to define configurations (Compl. ¶ 49), suggesting a potential non-infringing alternative to the claimed method.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification describes the process in general terms as using a GUI with "drag and drop and selection operations" to allow a user to "interactively generate a definition" without a "complicated configuration language" (’651 Patent, col. 2:41-49).
    • Evidence for a Narrower Interpretation: The specific embodiment illustrated in Figure 6 of the ’651 Patent shows a particular GUI with distinct panes for "Included," "Requires Choice," and "Optional" parts. This specific depiction could be used to argue for a narrower construction limited to an architecture that explicitly uses these classifications to generate the definition.

VI. Other Allegations

  • Indirect Infringement: Ford seeks a declaratory judgment that it does not indirectly infringe the patents-in-suit (Compl. ¶¶ 63, 67, 71). The complaint does not, however, allege specific facts regarding inducement or contributory infringement, as it is taking a defensive posture against Versata's alleged threats.
  • Inequitable Conduct: Ford alleges that the '651 patent, and by extension its '308 and '294 "child" patents, are unenforceable due to inequitable conduct (Compl. ¶¶ 135, 164). The complaint alleges that during prosecution of the '651 patent, Versata's inventors and patent attorney intentionally failed to disclose Versata's own prior art "SalesBUILDER" software to the USPTO (Compl. ¶ 135, 159-163). Ford alleges this prior art was highly material, as it was on sale more than one year before the patent's filing date and allegedly practiced every limitation of independent claims 1 and 60 (Compl. ¶¶ 139, 145, 148). The complaint includes a screenshot from a 1993 marketing brochure for SalesBUILDER, which depicts a "Maintenance System" with a "Product Editor" for defining "required" elements and "Options," features central to the '651 patent's claims (Compl. p. 28).

VII. Analyst’s Conclusion: Key Questions for the Case

  • A central issue for the case will be one of inequitable conduct: can Ford prove by clear and convincing evidence that Versata, with an intent to deceive the USPTO, withheld material information regarding its own prior art "SalesBUILDER" software during the prosecution of the '651 patent? The answer could render the entire asserted patent family unenforceable.
  • A key evidentiary question will be one of technical divergence: can Ford demonstrate that its "PDO" software, based on what it describes as its own "super configurator" invention, operates in a manner that is "fundamentally different" from the methods of generating definitions and validating configurations as claimed in the Versata patents?