UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

Ford Motor Company,

Plaintiff,

v.

Versata Software, Inc., f/k/a Trilogy 

Software, Inc., Trilogy Development 

Group, Inc. and Trilogy, Inc.,

Defendants.

Case No. 15-10628-MFL-EAS

JURY TRIAL DEMANDED

COMPLAINT FOR DECLARATORY JUDGMENT

Pursuant to the Declaratory Judgment Act, 28 U.S.C. §2201, Plaintiff Ford 

Motor Company (“Ford”) requests a Declaratory Judgment that Ford has not

infringed any intellectual property rights owned by defendants Versata Software, 

Inc. f/k/a Trilogy Software, Inc., Trilogy Development Group, Inc., and Trilogy, 

Inc. (individually and collectively “Defendants”).

Ford’s Complaint for Declaratory Judgment is based on the following 

allegations:

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I. THE PARTIES

1. Ford is a Delaware corporation with its principal place of business at 

One American Road, Dearborn, Michigan.

2. On information and belief, Versata is a Delaware corporation having 

its principal place of business in Austin, TX.

3. On information and belief, Trilogy Development is a California

corporation having its principal place of business in Austin, TX.

4. On information and belief, Versata became a wholly-owned 

subsidiary of Trilogy Development in 2006, and Trilogy Development is the parent 

company of Versata and its subsidiaries.

5. On information and belief, Trilogy, Inc. is a Delaware corporation 

having its principal place of business in Austin, TX.

II. JURISDICTION AND VENUE

6. Ford incorporates the allegations of paragraphs 1-5. 

7. This Court has jurisdiction over these claims pursuant to 28 U.S.C. 

§§1331, 1338, and 2201.

8. As detailed below, an actual case and controversy exists concerning 

the alleged infringement of one or more of Defendants’ patents, the alleged 

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misappropriation of Defendants’ purported trade secrets, and Ford’s obligations 

pursuant to a 2004 agreement with Defendants.

9. Venue is proper in this Court pursuant to 28 U.S.C. §§ 1391(b).

III. BACKGROUND FACTS

10. Ford incorporates the allegations of paragraphs 1-9.

Ford’s Early Vehicle Configuration Software

11. Ford is an Original Equipment Manufacturer (“OEM”) of 

automobiles.

12. Ford sells a wide range of vehicle lines in different vehicle categories, 

such as compact cars, SUVs, sedans and pick-up trucks. Each vehicle line in each 

category has many different configurations and options. For example, most 

vehicles are offered with more than one engine choice, more than one transmission 

choice, more than one wheel choice and several other configurations and options.

13. Not all vehicle components are compatible with one another. For 

example, a particular engine may not be compatible with a particular transmission. 

A particular transmission, however, may be compatible with several different (but 

not all) available engine selections.

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14. Given the complexity and options available on a particular vehicle, 

millions of configurations are possible for each vehicle line. 

15. Beginning in the 1990s, Ford developed the Marketing Feature 

Availability List (“MFAL”) and the “Product Feature Database” (“PFDB”) 

software to help Ford define and manage valid vehicle configurations within Ford.

Defendants’ Configuration Software

16. In October 1998, Ford licensed “SC Config” software from 

Defendants. The SC Config software proved incapable of handling the complexity 

and volume of data required to support Ford’s needs. 

17. Thus, at the same time Ford licensed SC Config, Ford and Defendants 

entered into in a Contract Services Agreement (“CSA”) governing the 

development of customized software for Ford.

18. The CSA states that Ford either owns, or has a royalty-free license to 

reproduce the software deliverables and customizations for the SC Config 

software.

19. Between 1999 and 2004, Defendants and Ford jointly developed the 

“Automotive Configuration Manager” (“ACM”) pursuant to the CSA.

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20. The ACM was an adaptation of SC Config for use within Ford. This 

was required due to the high levels of data volumes and the complexity of Ford’s 

vehicle offerings.

21. Ford paid Defendants tens of millions of dollars for the ACM 

development services pursuant to the CSA.

22. In December 2004, Ford and Defendants entered into a Master 

Subscription and Services Agreement (“MSSA”), governing the licensing of, inter 

alia, the ACM software.

23. Similar to the CSA, the MSSA included provisions establishing 

Ford’s ownership, or license to reproduce, deliverables created under the MSSA.

Defendants Unilaterally Declares The ACM Software “Obsolete” And Terminate

Ford’s Maintenance & Support For The ACM Software

24. In November 2010, Defendants informed Ford that the ACM software 

was “obsolete,” and that Ford was required to license Defendants’ new “cloudbased” computing platform going forward. For security reasons, Ford was not 

willing to move its proprietary vehicle configuration data off-premises to the 

“cloud,” i.e., the Internet.

25. Prior to these discussions, Defendants threatened Ford with 

termination of the license for the original ACM software if Ford refused to move to 

the “cloud-based” platform. 

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26. During subsequent discussions with Ford, however, Defendants later 

permitted Ford to continue using the “obsolete” ACM software at an annual license 

fee of several million dollars, but without Defendants’ maintenance or support

services.

27. Because Ford needed maintenance and support for the ACM software, 

and because Defendants had previously threatened to terminate its license for the 

original ACM software, Ford entered into an addendum to the original ACM 

software licensee.

28. In the addendum, Ford paid Defendants a substantial additional fee for 

an “Extended Support Term” for the original ACM software and for Defendants to 

waive their right to terminate the ACM license for convenience during the 

Extended Support Term.

Defendants Terminated Ford’s ACM License, And Described Their Exorbitant 

Licensing Fees As “Extortion”

29. Defendants notified Ford on October 7, 2014 that they were 

terminating Ford’s ACM license, effective January 1, 2015. Defendants’ letter 

stated that Ford was to cease using the ACM software by January 1, 2015.

30. On November 13, 2014, Defendants extended the termination date to 

January 15, 2015 and again stated that Ford was to cease using the ACM software 

by the extended date.

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31. However, Versata’s demands were in direct violation to the terms of a 

2011addendum. In this addendum, Versata waived its right to terminate Ford’s 

right to sustained use through the end of 2015 in exchange for a fee.

32. In parallel with these termination notices, Defendants presented Ford 

with unreasonable license terms for Defendants’ “obsolete” ACM software Ford 

had been using since 2005.

33. Defendants’ new licensing proposal was 5 years at a dollar amount 

that is incrementally greater than the amount Ford would have paid for the exact 

same “obsolete” ACM software previously licensed to Ford on an annual basis.

34. During a conference call regarding Defendants’ new licensing 

proposal, a Defendant representative stated to Ford representatives that “we could 

have extorted a lot more money out of you three years ago.”

35. Ford did not accept Defendants’ unreasonable license proposal. On 

December 19, 2014, Ford notified Defendants that Ford would no longer be using 

the ACM software. 

Ford Research Engineers Invented, Developed And Patented Their Own 

Configuration Software; Defendants Forced Ford To Changeover

36. Beginning in 2010, engineers from Ford’s Research and Advanced 

Engineering department were working to develop software that Ford might use in 

the future to determine which vehicle configurations sell the best.

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37. The objective of the new software was to determine, of the millions of 

possible vehicle configurations, which configurations were likely to sell the 

quickest to minimize the amount of time the vehicles sit in dealer inventory, 

referred to as “days on lot.”

38. To accomplish this objective, the engineers needed to swiftly define 

and analyze millions of possible vehicle configurations, all in an attempt to narrow 

the universe of possible configurations to those buildable configurations relevant to 

an individual dealer and further constrained to avoid combinations of options likely 

to lengthen the “days on lot.” 

39. These research engineers ultimately invented software that managed 

the millions of possible vehicle configurations very reliably, and in a very efficient 

manner. The engineers referred to their invention as the “super configurator.”

40. In parallel with Ford’s efforts in research, Ford Product Definition

engineers were trying to better understand vehicle complexity so that they could

reduce number of manufactured configurations and ultimately reduce cost. These 

efforts utilized the output of the Feature Query Validation (FQV) Service and data 

from ACM rule reports. The efforts yielded some basic tools to assess complexity 

and some proofs-of-concept, but proved to be of limited broader use due to the 

computing power required. Analyzing moderately complex programs required a 

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supercomputer to run for days and complex programs failed to complete 

processing.

41. In 2011, Ford’s Product Definition engineers and Research engineers 

recognized that the super configurator technology developed in Ford’s research 

department was orders of magnitude more powerful than the approaches developed 

using FQV or ACM. The super configurator was able to work successfully with 

vehicle programs of great complexity. Also, with the greater processing power, the 

super configurator technology could enable many uses beyond the simple 

complexity assessments that were initially targeted by the Product Definition 

engineers. The new technology could be used as the basis for a replacement for 

the ACM software – software that Defendants had declared “obsolete” and 

threatened to terminate.

42. The two teams joined forces and, under the heading of Total 

Configuration Management (TCM), continued to improve the performance and 

extend the capabilities of the super configuration technology.

43. Ford filed a patent application on its super configurator software in 

October 2011, and received a patent covering its invention in August 2014, U.S. 

Patent No. 8,812,375 (the ‘375 patent).

44. As explained in the ‘375 Patent, Ford’s invention approaches vehicle 

configuration very differently, and more efficiently, than Defendants do. 

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45. Ford disclosed Defendants’ configuration patents to the U.S. Patent & 

Trademark Office (“PTO”) during examination of the ‘375 Patent. The PTO 

allowed Ford’s ‘375 patent over Defendants’ patents because Ford’s software 

operates fundamentally differently.

46. From 2011 to 2014, Ford developed the “PDO” vehicle configuration 

software to replace the obsolete ACM software. Ford’s PDO software was 

constructed using Ford’s patented super configurator invention, and provides 

several significant technical advantages over the ACM software.

47. For example, the patented configuration engine used in Ford’s PDO

software is more accurate than the ACM software, providing Ford with higher data 

integrity than the ACM software.

48. In addition, Ford’s PDO software provides a foundation that is 

capable of managing in a coherent manner a broad range of related data including 

integrating data representing vehicle volumes, configuration mix and weight –

something the ACM software cannot do. The PDO software also provides the 

potential for extended analytic capabilities over the ACM software.

49. Another significant advantage of Ford’s PDO software over the ACM 

software is that PDO has been architected to support future extensions planned to 

enable Ford’s business people to easily define vehicle configurations themselves, 

without requiring the expert configuration codification analysts that the ACM 

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software required. This will dramatically increase the efficiency and utility of the 

configuration software within Ford.

50. Ford’s PDO software also allows Ford to develop and deploy reusable 

powerful global data services. ACM was geared to support a small group of core 

codification analysts and was not capable of handling high volumes of complex 

real-time data requests. PDO is architected to support hundreds of users 

interacting with PDO data services on a daily basis.

51. From the hardware perspective, Ford’s PDO software runs on a 

modern computing platform, which is more closely aligned with Ford’s computing 

infrastructure strategy.

52. Ford’s PDO software is also scalable to meet Ford’s global needs 

without a significant upgrade, unlike the ACM software.

53. Driven by the technical drawbacks of the ACM software, Defendants’

repeated termination notices, and their unreasonable unilateral escalation of license 

fees (which Defendants referred to as “extortion”), Ford was forced to incur costs 

to prepare and deploy the patented PDO software into production prior to January 

1, 2015.

Defendants Threatened Ford With Patent Infringement, Copyright 

Infringement, And Misappropriation of Trade Secrets, and Demanded an Audit 

of Ford’s PDO Software and Ford’s PDO Developers

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54. In its termination letter sent October 7, 2014, Defendants attached a 

list of 86 U.S. patents and stated that Ford “has no right nor license to use any such 

claimed inventions outside of its now expiring licensed use of [Defendants’]

Software.”

55. At a meeting in Dearborn, MI on December 19, 2014 between counsel 

and client representatives for Defendants and Ford, Ford notified Defendants of 

Ford’s intention to switch to Ford’s patented configuration software. A

representative of Defendants responded stating that Ford’s replacement 

configuration software must infringe Defendants’ intellectual property, including 

its patents, copyrights and trade secrets.

56. On December 23, 2014, Defendants notified Ford of their “inten[t] to 

exercise its on-premises audit rights pursuant to Section 3.5 of the [MSSA].” In 

particular, Defendants demanded an audit of “the development of an internal (or 

third party) Ford solution to replace [Defendants’] Software.”

57. Defendants’ audit notice also requested interviews of “Ford personnel 

who at any time worked with any of [Defendants’] Software, Materials, 

Confidential Information and/or Intellectual Property and also who at any time 

worked on the development of a Ford internal (or third party) solution to replace 

[Defendants’] Software.”

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58. According to Defendants’ website, the following three patents cover 

their Automotive Configuration software: U.S. Patent No. 5,825,651 (the ‘561 

Patent, Exhibit A), U.S. Patent No. 6,405,308 (the ‘308 Patent, Exhibit B), and 

U.S. Patent No. 6,675,294 (the ‘294 Patent, Exhibit C).

59. These patents were included in the list of 86 patents that Defendants

sent to Ford in its October 7, 2014 termination letter. The ‘651 Patent was the first 

patent on the list.

60. According to assignment records archived at the U.S. Patent & 

Trademark Office, these patents are currently assigned to Defendants.

COUNT #1:

DECLARATORY JUDGMENT THAT FORD

DOES NOT INFRINGE THE ‘651 PATENT

61. Ford incorporates the allegations of paragraphs 1-60.

62. As a result of threats Defendants made to Ford concerning 

Defendants’ configuration patents, including the ‘651 Patent, and Defendants’

demand to audit Ford’s PDO code and interview Ford’s PDO developers, an actual 

case or controversy exists with respect to the ‘651 Patent.

63. Ford’s PDO software does not directly or indirectly infringe the ‘651 

patent.

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64. Ford is entitled to a declaratory judgment that it has not infringed and 

is not infringing the ‘651 patent.

COUNT #2:

DECLARATORY JUDGMENT THAT FORD

DOES NOT INFRINGE THE ‘308 PATENT

65. Ford incorporates the allegations of paragraphs 1-64.

66. As a result of threats Defendants made to Ford concerning 

Defendants’ configuration patents, including the ‘308 Patent, and Defendants’

demand to audit Ford’s PDO code and interview Ford’s PDO developers, an actual 

case or controversy exists with respect to the ‘308 Patent.

67. Ford’s PDO software does not directly or indirectly infringe the ‘308 

patent.

68. Ford is entitled to a declaratory judgment that it has not infringed and 

is not infringing the ‘308 patent.

COUNT #3:

DECLARATORY JUDGMENT THAT FORD

DOES NOT INFRINGE THE ‘294 PATENT

69. Ford incorporates the allegations of paragraphs 1-68.

70. As a result of threats Defendants made to Ford concerning 

Defendants’ configuration patents, including the ‘294 Patent, and Defendants’

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demand to audit Ford’s PDO code and interview Ford’s PDO developers, an actual 

case or controversy exists with respect to the ‘294 Patent.

71. Ford’s PDO software does not directly or indirectly infringe the ‘294 

patent.

72. Ford is entitled to a declaratory judgment that it has not infringed and 

is not infringing the ‘294 patent.

COUNT #4:

DECLARATORY JUDGMENT THAT FORD OWNS,

OR IS LICENSED TO REPRODUCE, SOFTWARE

TRILOGY DEVELOPED PURSUANT TO THE 1998

CONTRACT SERVICES AGREEMENT

73. Ford incorporates the allegations of paragraphs 1-72.

74. As a result of threats Defendants made to Ford concerning 

infringement or misappropriation of Defendants’ alleged intellectual property, and 

Defendants’ demand to audit Ford’s PDO code and interview Ford’s PDO 

developers, an actual case or controversy exists with respect to ownership of any 

intellectual property associated with the ACM software.

75. In October 1998, Ford and Trilogy entered into the CSA governing, 

inter alia, title to Trilogy-developed software.

76. Between 1999 and 2004, Ford paid Defendants tens of millions of 

dollars pursuant to the CSA to develop the ACM software.

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77. Ford is entitled to a declaratory judgment that, pursuant to the CSA, 

Ford either owns, or has the right to reproduce without accounting to Trilogy, all 

software and intellectual property developed for the ACM.

78. To the extent Defendants own patents, trade secrets or copyrights 

covering functionality developed for the ACM under the CSA, Ford is entitled to a 

declaratory judgment that the CSA provides Ford at least a royalty-free license to 

practice and reproduce that intellectual property. 

COUNT #5:

DECLARATORY JUDGMENT THAT FORD OWNS, 

OR IS LICENSED TO REPRODUCE, SOFTWARE

TRILOGY DEVELOPED PURSUANT TO THE 2004 MASTER 

SUBSCRIPTION AND SERVICES AGREEMENT

79. Ford incorporates the allegations of paragraphs 1-78.

80. As a result of threats Defendants made to Ford concerning 

infringement or misappropriation of Defendants’ alleged intellectual property, and 

Defendants’ demand to audit Ford’s PDO code and interview Ford’s PDO 

developers, an actual case or controversy exists with respect to ownership of any 

intellectual property associated with the ACM software.

81. In December 2004, Ford and Trilogy entered into the MSSA

governing, inter alia, licensing and title to Trilogy-developed software 

deliverables.

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82. The MSSA states that Ford is either the owner of the software 

deliverables, or is licensed to reproduce, use and exploit the deliverables on a 

“royalty free” basis.

83. Ford is entitled to a declaratory judgment that, pursuant to the MSSA, 

Ford either owns, or has the right to reproduce without accounting to Trilogy, 

deliverables for the ACM.

84. To the extent Defendants own patents, trade secrets or copyrights 

covering deliverables developed under the MSSA, Ford is entitled to a declaratory 

judgment that the MSSA provides Ford at least a royalty-free license to practice 

and reproduce that intellectual property. 

COUNT #6:

DECLARATORY JUDGMENT THAT 

FORD DID NOT MISAPPROPRIATE

DEFENDANTS’ TRADE SECRETS

85. Ford incorporates it allegations in paragraphs 1-84.

86. As a result of threats Defendants made to Ford concerning 

misappropriation of Defendants’ alleged trade secrets in connection with Ford’s 

development of the PDO software, and Defendants’ demand to audit Ford’s PDO 

code and interview Ford’s PDO developers, an actual case or controversy exists 

with respect to Defendants’ alleged trade secrets.

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87. At no time did Defendants provide Ford with the source code for the 

SC Config or ACM software.

88. The software customizations for the SC Config or ACM software 

were either Ford specified, or jointly developed by Ford and Defendants for 

configuring vehicles within Ford and consistent with Ford’s business practices.

89. Pursuant to the CSA and MSSA, Ford either owns, or has a royaltyfree license to reproduce the software deliverables and customizations for the SC 

Config and ACM software.

90. Ford is entitled to a declaratory judgment that Ford did not 

misappropriate Defendants trade secrets to develop Ford’s PDO software. 

COUNT #7:

DECLARATORY JUDGMENT THAT 

DEFENDANTS ARE NOT PERMITTED TO 

INSPECT FORD’S PDO SOFTWARE OR 

INTERVIEW FORD’S PDO DEVELOPERS 

PURSUANT TO THE AUDIT PROVISIONS OF

THE 2004 MSSA

91. Ford incorporates the allegations of paragraphs 1-90.

92. On December 23, 2014, Defendants notified Ford of Defendants’

“inten[t] to exercise its on-premises audit rights pursuant to Section 3.5 of the 

[MSSA].” In particular, Defendants demanded an audit of “the development of an 

internal (or third party) Ford solution to replace [Defendants’] Software.”

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93. Defendants’ audit notice also requested interviews of “Ford personnel 

who at any time worked with any of Defendants’ Software, Materials, Confidential 

Information and/or Intellectual Property and also who at any time worked on the 

development of a Ford internal (or third party) solution to replace Defendants’

Software.”

94. The MSSA does not permit Defendants to inspect Ford’s PDO 

software, or interview Ford’s PDO developers. The MSSA simply requires Ford to 

provide access to the licensed software and records. 

95. Ford’s PDO software was developed by Ford independent of 

Defendants’ ACM software. Thus, Ford has no obligation to permit Defendants to 

inspect Ford’s PDO software, or interview Ford’s PDO developers. 

96. To fulfill its obligations under the MSSA, Ford has agreed to provide 

Defendants with an inspection of Ford’s records pertaining to the licensed ACM 

software. Ford has informed Defendants, however, that it will not permit 

Defendants to audit Ford’s PDO software, or interview Ford’s PDO developers.

97. Because Ford contends that the requested audit of Ford’s PDO 

software and developers is not permitted under the MSSA, and Defendants contend 

that such an audit is permitted, an actual case or controversy exists with respect to 

the MSSA, and Ford’s obligations thereunder.

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98. While the parties’ dispute arises from a contract provision concerning 

the scope of Defendants’ audit rights under the MSSA, the underlying case or 

controversy between the parties involves a substantive matter of patent law. As 

explained in detail above, Defendants’ October 7, 2014 termination letter attached 

a list of 86 U.S. patents which Defendants stated Ford “has no right nor license to 

use any such claimed inventions outside of its now expiring licensed use of 

[Defendants’] Software.”

99. At a meeting in Dearborn, MI on December 19, 2014 between counsel 

and client representatives for Defendants and Ford, a Defendant representative 

stated that Ford’s replacement configuration software must infringe Defendants’

intellectual property, including its patents.

100. Four days later, on December 23, 2014, Defendants demanded an 

audit of “the development of an internal (or third party) Ford solution to replace 

Defendants’ Software” and interviews of “Ford personnel who at any time worked 

with any of Defendants’ Software, Materials, Confidential Information and/or 

Intellectual Property and also who at any time worked on the development of a 

Ford internal (or third party) solution to replace [Defendants’] Software.”

101. Defendants’ allegations and demands to Ford reveal a present case or 

controversy between the parties concerning the extent to which Ford’s PDO 

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software practices Defendants’ patents and other intellectual property. That is the 

reason Defendants expressed for requesting the audit in the first place.

COUNT #8:

BREACH OF CONTRACT

102. Ford incorporates the allegations of paragraphs 1-101.

103. Ford and Versata entered into an enforceable contract granting Ford 

the right to use Versata’s ACM software in exchange for a fee.

104. Pursuant to a 2011 addendum to the MSSA, Versata waived its right 

to terminate the contract for convenience before January 15, 2015 in exchange for 

a fee.

105. Ford paid the fee specified in the 2011 addendum and therefore 

satisfied all conditions precedent.

106. Pursuant to a 2011 addendum to the MSSA, Versata waived its right 

to terminate our right to sustained use through the end of 2015 in exchange for a 

fee. Versata’s termination notices were in direct violation to the 2011 addendum, 

and prohibited Ford from exercising its option to continue use of the ACM 

software through December 31, 2015.

107. Due to the termination notices, Ford was also forced to incur costs to 

complete and deploy the alternate PDO software prior to January 1, 2015.

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108. Versata’s conduct constituted a breach of the MSSA.

109. As a direct and proximate cause of Versata’s breach of the MSSA, 

Ford has suffered damages including, but not limited to, the fees Ford paid to 

Versata for the waiver and the costs Ford wrongfully incurred to prepare and 

deploy the PDO software prior to January 1, 2015.

IV. RELIEF REQUESTED

Ford requests a trial by jury on any and all issues so triable, and an order 

declaring that:

a. Ford does not infringe and has not infringed the ‘651 patent;

b. Ford does not infringe and has not infringed the ‘308 patent;

c. Ford does not infringe and has not infringed the ‘294 patent;

d. Ford owns or has the royalty-free right to right to reproduce software that 

Trilogy developed pursuant to the 1998 Contract Services Agreement;

e. Ford owns or has the royalty-free right to right to reproduce software that 

Defendants developed pursuant to the 2004 Master Subscription and 

Services Agreement;

f. Ford has not misappropriated Defendants’ trade secrets; and

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g. Section 3.5 of the 2004 Master Subscription and Services Agreement

does not authorize Defendants to inspect Ford’s PDO source code or 

interview Ford’s PDO developers.

h. Versata has breached the MSSA contract and Ford is entitled to damages 

suffered as a result of this breach.

JURY TRIAL DEMAND

Pursuant to Fed. R. Civ. P. 38(b) and 5(d), Plaintiff demands a jury trial of 

all issues triable by jury.

Dated: March 16, 2015 Respectfully submitted,

By: /s/ John S. LeRoy 

John S. LeRoy (P61964)

Frank A. Angileri (P45611)

Chanille Carswell (P53754)

John P. Rondini (P72254)

BROOKS KUSHMAN P.C.

1000 Town Center, 22nd Floor

Southfield, MI 48075

Tel.: 248-358-4400 / Fax: 248-358-3351

jleroy@brookskushman.com

fangileri@brookskushman.com

ccarswell@brookskushman.com

jrondini@brookskushman.com

Attorneys for Plaintiff, Ford Motor 

Company

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