Temporary Restraining Order - Softscape / SuccessFactors

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U.S. Judge Claudia Wilken granted SuccessFactors its motion for a temporary restraining order (TRO)against Softscape. Specifically, the court ordered Softscape to:

• not distribute the PowerPoint deck in question
• not access SuccessFactors' websites or other intellectual property
• not make statements that purportedly come from another

The court further ordered Softscape to post a $10,000 bond. The court also granted permission to issue subpeonas to Verizon and Comcast. Those subpeonas will help identify who either sent the PowerPoint deck to SuccessFactor prospects or who logged into SuccessFactor webinars.

My assessment:

The judge issued an appropriate TRO. The impact on Softscape, so far, is minimal but when the participants are identified, it could get problematic for those involved. SuccessFactors gets what it most needs: the end of the distribution of this document and a pile of sympathetic publicity.

At this juncture, the case will now go through a protracted discovery process followed by additional court room time for the civil case. When the discovery process is completed, it will be interesting to see if criminal charges are possible. Those could arise if SuccessFactors' web site or other intellectual property was illegally viewed with stolen passwords or other acts.

For now, the talent management/human resources software space will go back to being a relatively calm space. It will get more interesting again once the discovery facts come to light. Who wins in this deal? No one really except the lawyers. Who'll pay is clear: Softscape and certain Softscape employees. Softscape will need to distance itself from rogue employee behavior, if that's indeed what happened. It will need to double down on its PR activities and become a more humble, chastened and repentant firm. That's okay and software buyers are actually a forgiving lot. They've forgiven a lot worse:

• CEOs who blew most of their investors' capital on elaborate Vegas parties instead of product development;
• CEOs convicted of crimes;
• Products with over 10,000 bugs
• Products that were late, by years, to market
• Loss of key company founders

Both companies need to move past this quickly and get prospects focused on the real matters at hand: talent management and HR problems in today's business economy. This dust-up should not become more important than solving their customers real business problems.

To read the judge's opinion see: http://www.softscape.com/pdf/doc/TRO_Decision080313.pdf     

Comments

[Phillip Barnhart]

Do HR departments really have the expertise OR the bandwidth to get involved with these kinds of issues by themselves?