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Statement by Lanny J. Davis, Attorney for Versata

July 16, 2015

Press Conference, Detroit, Michigan (July 16, 2015) — Versata has asked me to correct the public record regarding misstatements and distortions made by Ford in its legal filings regarding Versata’s rights to protect its trade secrets and patented technology called Automotive Configuration Management (“ACM”). That is what I am doing, with full respect to the judicial process and to my professional ethical responsibilities.

The ACM technology allows Ford to introduce new features and changes in its automobiles, which normally would trigger millions and billions of possible effects on the configuration of the modified model. But with ACM that process is stream-lined and made more efficient, with savings for Ford – working closely with Versata as a contractor-partner over nearly 20 years – totaling over one billion dollars. Versata, trusting Ford, has shared all its patented code, trade secrets, and know-how to allow it to use the technology to save it these substantial sums over the years.

Opinions and Allegations

Versata and I as their attorney are expressing our opinion and allegations in this statement. We are in the beginning of litigation in Michigan and in Texas. No facts have been decided by the ultimate decider of facts – the judge or the jury or both. Ford is entitled to disagree with Versata’s allegations of facts and opinions and characterizations. No sentence or fragment of this statement should be taken out of context.

I on behalf of Versata will be asking Ford various questions today.

It is time for Ford to turn the lights on, practice transparency as we at Versata are doing regarding this case, and answer our and the media’s questions. “No comment” won’t do anymore.

To Ford: Why not allow Versata in to inspect under the contract?

The most important question Versata is asking Ford to answer today is:

If you disagree with Versata’s allegations that Ford stole, in whole or in part, Versata’s core ACM technology and trade secrets, then why not let Versata and/or a neutral third party, examine Ford’s alleged substitute program in detail – its code, underlying designs and communications, emails, etc., during its development, rules and manuals. The license agreement Ford signed requires that Versata be given such access to verify that its patented ACM software and trade secrets have not been compromised – and to do so on site.

Why, we ask, won’t Ford say yes and allow Versata the access to which it agreed in the license agreement?

So far Ford continues to say no.

Why? What is Ford hiding if it has nothing to hide?

Versata says today to the media:

Don’t accept Ford’s insufficient offer to allow Versata onto its site to confirm that its software has been deleted from Ford’s servers. Ford knows — and they know Versata knows — that merely allowing Versata to confirm deletion of its software from Ford’s servers will prove nothing. Full access to individuals who worked on the substitute product is required and the documents pertaining to the new substitute Ford software is required.

Here to will fill in some of the details under the main themes of lies, deception, and cover-up is Mike Richards, a Versata executive and former senior manager for Ford over many years, as he just discussed.

The December 19, 2014 Ford-Versata Meeting: The Big Lie

We heard Mr. Richards describe the conduct at the highest levels of the Ford IT department.

I will focus today on the key moment in time: when what Versata alleges is the Big Lie and Cover-Up began.

And in the weeks and months ahead, Versata will expand on the alleged facts showing instances of intimidation and threats by Ford regarding this matter.

Versata is baffled by this conduct towards its business partner and contractor for more than 15 years, taking advantage of Versata’s technology and know-how that has been a crucial basis for cost savings in excess of $1 billion – used by its personnel all over the world.

When we mention Ford has saved over $1 billion over the years thanks to Versata’s ACM software, we can point to actual cash savings in such categories as reducing recall expenses, reducing warranty expenses, and particularly from costs of delays in bringing new models and new features to the market.

Versata’s law suit filed last May in federal court in the Eastern District of Texas – which was served first on Ford to start the litigation before Ford belatedly served Versata regarding its law suit in Michigan – will seek to recover these more than $1 billion in cash savings on the legal basis of “unjust enrichment” – i.e., Ford has been unjustly enriched as a result of its theft of Versata’s technology.

Today on behalf of Versata I am here to describe in detail something new – and that is the reason why there is a brick wall behind me with a huge hole in it.

The hole in the wall is an emblem of Ford’s broken promise – the specific alleged Big Lie that occurred on December 19, 2014.

That was the date that Versata learned for the first time that Ford had allegedly created a substitute software, called “PDO,” so it would no longer need Versata’s technology.

Versata was concerned when it heard this shocking news on December 19 for the first time. It knew it had been deceived while this secret effort had continued at Ford for years, at the same time Versata was in the offices of Ford sharing its confidential code and trade secrets underlying is ACM technology.

Versata managers asked themselves: Had Versata’s patented software and trade secrets been protected from those who were involved in inventing the allegedly new and different substitute Ford software, “PDO”?

Versata’s general counsel asked a crucial question when he heard this news. He used an expression familiar to businesspeople and professionals who want to separate confidential information that shouldn’t be shared within an organization. It is called creating a figurative “Chinese Wall.” He asked Ford managers whether such a figurative “Chinese Wall” had been established by Ford to protect Versata’a technology.

The Ford senior officials and attorney at the meeting assured the Versata team that, in fact, a “Chinese Wall” was kept in place during the development of their substitute technology that guaranteed Versata’s trade had not been compromised – at all. The “wall” was effective, they said.

Versata now believes that was a lie – and that the Ford managers present at the meeting knew it was a lie when they said it.

Indeed, Ford has revealed in their own court filings, perhaps without realizing it, the names of more than a dozen individuals who had access to Versata’s ACM software and who were also part of the team developing Ford’s alleged replacement technology, called “PDO.”

These individuals knew how Versata’s ACM technology worked, knew many of the key trade secrets, and many worked closely with the Versata technology over the years. And now it cannot be disputed that these same individuals were ALSO on the on the other side of the wall working secretly for years on developing the so-called substitute PDO program that performs the same or similar functions as Versata’s ACM technology.

And as hard as it is to believe this is a fact that is not in dispute –

The program manager for Versata’s ACM software was also the program manager for the secret group developing the PDO. We are not making that up.

So today Versata and I ask Ford, and hope the media will ask Ford:

Will you deny that on December 19, 2014, your representatives assured Versata’s representatives that those who worked on the substitute Ford software were separated by a figurative “Chinese Wall” from those who were familiar with and worked on Versata’s ACM technology and trade secrets?

Will you deny that you assured Versata managers on December 19, 2014, that there was, in fact, a “Chinese Wall” separating the two groups of people?

Do you agree that if you are going to have such a figurative Chinese Wall, you can’t have the same people on both sides of it?

Will you deny that the same Ford manager who was the program manager for Versata’s ACM software was also the program manager for the replacement software?

Will you deny that there were about a dozen or more Ford employees or contractors who were on both sides of the wall?

Will you deny that the brains of individuals who had intimate knowledge of Versata’s ACM technology and trade secrets can’t be divided by a Chinese Wall? And will you deny that the other side of their brains can make use of it as they develop a substitute technology performing the same or similar functions?

Finally, are there implications for the Ford brand about this alleged pattern of lies and deception regarding Versata’s trade secrets and ACM software?

If you lie about there being a “Chinese Wall” and justify people being on both sides of it, is there any consumer of Ford products who can trust Ford to tell the truth?

If Ford lied to and betrayed a loyal vendor and business partner over many years such as Versata — then is there any vendor that sells to Ford who can entirely trust Ford to honor its contract commitments and to protect its confidential information?

Is there any other small company selling its products to Ford who can afford to lower its guard or trust with confidence it won’t be crushed when it gets in Fords’ way?

These are Versata’s sincere and deeply-felt questions. They deserve Ford’s answers – especially as a public company to its shareholders.

So now you know why we started this press conference with a preview clip from a 2008 movie called “Flash of Genius.”

This is a true story about a man named Robert Kearns who invented the “intermittent windshield wiper,” took his patented invention to Ford, and trusted Ford to do the right things. Instead, he said Ford stole his invention, ran over him – and he said they thought they could get away with it.

Well, as you saw, Mr. Kearns knew he was just a little guy fighting the giant Ford – but that didn’t stop him from fighting, because he felt he was right: theft is theft.

He felt that just because Ford is big enough to be willing to steal someone’s invention doesn’t mean they should get away with it.

Well, Versata isn’t Robert Kearns, and its technology isn’t the intermittent windshield wiper.

But what Versata and Mr. Kearns have in common are the perceptions that they experienced the same thing at the hand of Ford’s senior managers of the IT department and those supervising them — lies, deception, and theft by Ford of someone else’s invention.

And that is why Versata believes it is fair to ask the question to consumers, vendors, and shareholders:

Can Ford be trusted?

That is the basis behind our new website that I’d like you all to visit:


This website contains Versata’s perception of the facts and circumstances behind Ford’s lies, theft, and deceit – all to the detriment of Versata and for the substantial financial benefit of Ford. And we will continue to update it with facts and documents as we proceed to prove the facts and the truth behind our allegations.

In the coming weeks and months, we will continue to try to correct the public record concerning Ford’s alleged lies and deceptions, which they repeated in their legal filings.

In the near future, we expect to document that Ford is also engaging, at the present time, in an active cover-up – using intimidation, threats, and bullying against ex-Ford employees and even some subcontractors to prevent them from talking to Versata investigators trying to obtain the facts and the truth.

How do we make sense of this alleged misconduct? What specific individual or individuals are behind it?

Our investigators believe they are making progress on answering these questions.

Stay tuned.