Softscape - SuccessFactors Dustup

Bad Marketing or a Bad Legal Case?p>

Today, SuccessFactors (www.successfactors.com) filed suit against competitor Softscape. On the Success Factors web site, Success Factors alleges:

"SuccessFactors, Inc. (NASDAQ:SFSF), today announced that it has filed a lawsuit in the United States District Court for the Northern District of California (Case No. CV 08 1376 EDL) against Softscape, Inc., for False Advertising, Trademark Infringement, Computer Fraud and Abuse, Defamation, Trade Libel, Intentional Interference with Prospective Economic Relations, and Unfair Competition.

The suit arises from a presentation recently anonymously emailed to many of SuccessFactors' customers and prospects purporting to be authored by a former customer of SuccessFactors and containing numerous false, misleading and defamatory statements relating to SuccessFactors and its products and customer relationships.

SuccessFactors is seeking a court order prohibiting Softscape from distributing false and misleading information about SuccessFactors, using SuccessFactors' trademarks, accessing SuccessFactors' computer systems without authorization, and wrongfully interfering with or disrupting SuccessFactors' relationships with customers and prospective customers, and requiring it to issue corrective advertising advising every known recipient of the presentation and the public at large of its falsity."

Softscape has already responded and says this:

"The facts in this case will speak for themselves. This is a frivolous public relations tactic without merit or foundation, and we will defend all of the claims vigorously. The SEC maintains that publicly traded companies have the fiduciary obligation to their shareholders and the marketplace to disclose absolute facts. As a profitable and recognized category leader in the human capital management industry, our focus is not competitors. Our focus is on continuous product innovation and maintaining the highest customer satisfaction and retention rates."

Having been on the sidelines of a similar spat, this type of situation can arise when an overzealous sales person provides a "for internal use only" competitive analysis document to a client. The sales person hopes that this added info will clinch the deal for him/her. Unfortunately, someone on the prospect's side is partial to the other vendor and shares this confidential sales tool with the maligned vendor.

Should we read much into this spat? Probably not if it's an isolated case but SuccessFactors will want its pound of flesh. Let's watch it unfold.

(To read the complaint see: http://www.successfactors.com/docs/complaint.pdf )

Comments

[Roy]

Where can go to see the PPT?

[Brian Sommer]

I don't have the PowerPoint deck in question and never have. Moreover, even if I did come into possession of it, I certainly wouldn't distribute it. Doing so would be unethical and could make me a party of this litigation. That goes for others, too.