Wellington technology firm in IP dispute with APN

APN categorically rejects all of Eyede's allegations, says the company

Petone online database specialist company Eyede is in a legal dispute over intellectual property with APN Print, a division of New Zealand Herald owner APN News and Media, and a former APN subsidiary, Security Plastics.

A statement of claim was filed in the High Court in October 2006. Eyede co-founder Wayne Stemp says indications are that it may be at least six more months before the case can be heard.

The claim notes that Eyede has trademarked its eSOMS (Eyede secure online management system). In 2003, it had signed a memorandum of understanding and a deed of confidentiality with the defendants, which led to a three-year contract.

Up to $1 million a year in sales and licensing revenue was expected, and the parties were to indemnify each other against all claims and liabilities from any contractual breach.

In April 2006, the claim says, APN said it wouldn’t renew the licence, so the server at Security Plastics in Australia was switched off remotely.

Eyede claims that, subsequently, its secure system was accessed using the APN user name and password.

In August 2006, APN advised Eyede of the sale of Security Plastics to American Banknote, one of the largest private sector security printers in the world. Eyede says it wasn’t advised of the pending sale, in contravention of its licence.

It also claims that Security Plastics didn’t return the intellectual property when the licence ended in July 2006, and that around that time the licence was breached by APN disclosing an exclusive “super user” log-in and password details to a third party. The third party had logged into the Eyede web-based system, it is claimed.

“APN categorically rejects all of Eyede’s allegations and will take all necessary steps to defend the claim,” APN Print New Zealand said in a statement to Computerworld last week.

Further, Eyede says APN had made representations to the market that it owned the Eyede solution, which had resulted in confusion in the New Zealand high school ID card market as to ownership of the solution.

Eyede is seeking from the court a declaration that it is the lawful owner of the IP. It also wants an inquiry as to damages and losses, and an order awarding these, as well as costs.

It also seeks judgement of a claimed shortfall of nearly $300,000 from Security Plastics on a minimum payable royalty contract.

Stemp wouldn’t comment specifically on the case but did say that Eyede was the first company to offer a web-based ID management system and that the action was largely about confidentiality and moral integrity.

The company has “20 plus” staff, and its clients include, as well as Infratil, the Ministry of Social Development, where it is involved with Unisys in the supply of community cards and gold cards for senior citizens.

Eyede recently won a contract to provide the intelligence behind the smart cards for infrastructure investor Infratil.

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