Epicor sues Applied Integration over third part support

Epicor is trying to stop Utah IT services firm Applied Integration from providing third party support for its Dimensions software, alleging that the company has committed illegal acts in the course of doing so.

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Epicor is trying to stop Utah IT services firm Applied Integration from providing third party support for its Dimensions software, alleging that the company has committed illegal acts in the course of doing so.

Dimensions is a distribution management software system aimed at lumber yards and home centres.

"A support contract with Epicor is the only means by which a Dimensions customer may obtain access to programmers able to examine and modify proprietary, copyrighted and confidential information, including the compiled code of the Dimensions Software, to resolve problems which may arise during a customer's use or operation of the system," Epicor's lawsuit states.

Providing updates and support for the product "necessarily requires reproducing, modifying, altering, publishing or displaying copyrighted or proprietary information regarding Dimensions Software in a manner Epicor has never licensed to any other party," it adds.

Moreover, AI has "planned and implemented a scheme whereby it monetises the value of Epicor's proprietary information and copyrights by acting as a vendor of Dimensions Updates and Dimensions Support, despite being unauthorized and unlicensed to do so," the suit states.

AI represents itself as a "legitimate alternative" to Epicor for Dimensions support as well as a close partner of previous Dimensions seller Activant, an ERP (enterprise resource planning) vendor equity firm Apax Partners bought last year along with Epicor in a roughly $2 billion (£1.2 billion) deal, according to the suit. Neither claim is true, the suit adds.

Some Dimensions users have dropped their Epicor support contracts and instead signed up with AI, which has "illicitly acquired, copied, installed and run Dimensions Updates on their systems," according to the suit.

AI's owner, Don Cockayne, used to work on Dimensions, and AI has described him as "one of the driving technical forces" behind the software, the complaint states.

"On basis of Mr. Cockayne's former employment with Dimensions, and through other means, AI had access to Epicor proprietary information," including source code and documentation, it states. "At all times Mr. Cockayne has been and remains obligated to hold proprietary Dimensions information in strictest confidence." There is no way AI could provide the level of support it offers lawfully, according to the suit.

Epicor is suing for copyright infringement, misappropriation of trade secrets and other allegations. It is asking for an injunction against Applied Integration as well as assorted damages.

Reached for comment on Tuesday, Cockayne declined comment and said lawyers for his firm and Epicor are in discussions. "We're trying to see if we can work this out outside of court," he said.

On one level, it's no surprise the spectre of litigation has grown around third party support companies, given that annual maintenance fees carry extremely high profit margins for vendors, and keep money rolling in even when new software licence sales slow down.

Maintenance revenue is even more important for older software platforms, which may have a stable but fairly static customer base that is eroded with every defection to a third party support provider.

There's no way to conclude from Epicor's suit whether AI is in the wrong, but "what's extremely disturbing is how vendors are working hard to prevent customers from having third party maintenance options," said analyst Ray Wang, CEO of Constellation Research. "The notion of perpetual software licence rights should include the right to self-support software or engage in a third party to provide tax, regulatory and additional updates."

"As many vendors try to close up these loopholes, customers are left in a no-man's land position of being forced into de-facto maintenance contracts with only the vendor," he added. "That being said, if AI violated any copyright and IP provisions, this will effectively shut down an avenue of third party support."

End users need to band together and collectively demand clear rights to third party support options, Wang said. "Otherwise, we have a situation similar to automakers forcing drivers to only go to them for maintenance."

If some of the industry's largest systems integrators actively entered the third party support market, it would effectively "disrupt the balance of power and put more money into the hands of the end-users and the system integrators," he added.

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