Nissan Sues Software AG Over 'Extraordinary' License Demands

Nissan filed suit after Software AG tried to charge the Japanese automaker more than $3 million for the right to hand its applications over to an outsourcer.

Paul McDougall, Editor At Large, InformationWeek

November 19, 2007

2 Min Read

Nissan is suing Software AG after the German software vendor tried to charge the Japanese automaker more than $3 million for the right to hand its applications over to an outsourcer.

Nissan in court papers filed last week called the move by Software AG a money grab from a vendor that "is not experiencing any significant growth from new products."

Nissan has used Software AG's Adabas data management software and Natural programming environment to power its order-management system and other business tools since 1983.

The trouble began after the automaker outsourced application maintenance work for its Software AG environment to IBM in 1999 and application development work to Indian offshore provider Satyam in 2006, according to court papers filed in U.S. District Court in Nashville.

Nissan in 1999 agreed to pay Software AG $343,800 so IBM could access Adabas and Natural as Nissan's "designated outsource vendor." But Software AG demanded an additional access fee of $3 million when Nissan handed application development work for the environment to Satyam in 2006.

Nissan refused to pay, claiming Satyam's work should covered by the access fee it already paid so IBM could work on the software.

Since its refusal, Nissan claims that Software AG has launched a campaign of "additional demands, each more extraordinary than the last."

For instance, Software AG is now claiming that it's owed $2.5 million for software used by Nissan Canada and that Nissan and Infiniti dealers in the United States and Canada have been using unlicensed Software AG software worth $4.9 million.

"Software AG recently has engaged in a widespread practice of auditing its licenses and demanding more fees from its licensees who are dependent on the Software AG software for their business operations," Nissan said in the court filing.

Nissan is asking the court for a ruling that it's not in violation of its license agreements with Software AG and other, unspecified damages.

A spokesman for Software AG on Monday said the company has not been formally served with the lawsuit and thus had no comment. He also declined to say whether Software AG recently has made any changes to its customer auditing program.

Software AG's sales of Adabas and related products grew 5% in the company's most recent quarter. Sales of webMethods products grew 150%. Software AG acquired webMethods earlier this year with an eye to boosting growth.

About the Author(s)

Paul McDougall

Editor At Large, InformationWeek

Paul McDougall is a former editor for InformationWeek.

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