12/1/08 Ins. & Tech. 15 (2008)
Anthony O'Donnell
The Delaware U.S. District Court has dismissed both Accenture's trade secret misappropriation charges against Guidewire Software and Guidewire's subsequent charges claiming that Accenture's allegations constituted bad faith litigation that was harmful to Guidewire's prospects in the marketplace. While the court's Oct. 8 decision to accept motions from both parties to dismiss certain charges, expressed in an opinion written by Judge Sue L. Robinson, puts an end to substantial aspects of Chicago-based Accenture's suit against Guidewire - at least for the time being - an Accenture source notes that the company's patent infringement case against Guidewire is "alive and well."
Accenture's suit, filed in December 2007, is related to Guidewire's interaction with Chicago-based P&C carrier CNA, which in 2003 accepted a bid for Guidewire's claims solution at a price $10 million less than Accenture's bid for implementation of the Accenture Claim Components solution. Accenture questioned Guidewire's (San Mateo, Calif.) ability to provide an acceptable solution to the carrier within the given time frame. Guidewire "seemed to have a surprisingly quick development trajectory, particularly in light of its small size and relatively light experience in the insurance market," Accenture alleged, inferring from that speedy trajectory that Guidewire "somehow gained access to Accenture trade secrets in creating its software and services."
'Fishing Expedition'
In her opinion, Judge Robinson argued that Accenture's reasoning fails to meet a requirement to "plead certain facts" relative to its trade secret misappropriation claim; while Accenture's claim implied that Guidewire possessed Accenture trade secrets, it did not allege that Guidewire obtained the information by improper means, or even allege the nature of the means. Nor did Accenture's complaint allege specifically that Guidewire gained access to Accenture Claim Components through CNA.
According to Judge Robinson's opinion, "There is no allegation that Guidewire either disclosed or used the secrets in developing Guidewire Insurance Suite, only that Guidewire 'seemed to' develop its product 'surprisingly quick[ly]' in Accenture's opinion, which is of no import. Accenture is not entitled to conduct a fishing expedition based upon such bare allegations." The opinion also concluded that there was no basis for charges that Guidewire engaged in unfair competition.
The failure of Guidewire's countersuit tracked closely to the speculative nature of Accenture's charges, in Judge Robinson's opinion. Guidewire based its claim that Accenture litigated in bad faith and competed unfairly on statements made by Accenture in a press release and on comments quoted in a December 2007 I&T article. But, argued Judge Robinson, "to the extent that [Accenture's] statements are viewed as statements of belief or opinion or conclusion, Guidewire fails to allege sufficient facts to make it plausible that Accenture did not truly hold those beliefs or opinions."
Guidewire also failed to plausibly argue that the public was misled by Accenture's statements, or that the statements were in fact "commercial speech" promoting the vendor's products, according to Judge Robinson's opinion. With specific regard to Guidewire's charge that Accenture's suit amounted to unfair competition under the common law, Judge Robinson wrote, "Guidewire has failed to allege that Accenture's conduct affected the marketplace at all, let alone actually interfered with one of Guidewire's legitimate business expectancies."
While Judge Robinson's opinion seemingly puts an end to Accenture's original allegations of improper practices on the part of Guidewire, the dismissed charges could yet resurface, according to John MacPete, an attorney with Atlanta-based Locke Lord Bissell & Liddell. Judge Robinson's opinion was "more of a procedural ruling, which is subject to reconsideration by the court, based upon what happens in discovery as the case goes forward," MacPete says. "It is possible that discovery related to the patent infringement claim could uncover facts that would justify Accenture asking the court to allow it to reintroduce the dismissed claims."
In response to the Delaware Court's ruling, Guidewire reiterated its position that Accenture should never have been granted its patent, but that Guidewire has not infringed the patent, whether it is valid or not. "We recently asked the U.S. Patent Office to reexamine the patent, and they have agreed to do so in light of our request," says Brian Desmond, Guidewire's VP of marketing.
