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MercuryGate Countersues in J.B. Hunt Software Licensing Case, for $5M

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MercuryGate Countersues in J.B. Hunt Software Licensing Case, for $5M

August 20, 2015
By Tara Seals, TMCnet Contributor

J.B. Hunt is suing MercuryGate for $3.1 million over a transportation management system (TMS) that it says is “virtually useless.” MercuryGate has however filed a counterclaim that tells a very different story than that of the trucking and transportation giant. The situation illustrates a thorny issue in software licensing: What happens when the client requests extensive customization of an off-the-shelf solution?


J.B. Hunt filed the suit in early August in the U.S. District Court in Fayetteville, Ark., alleging breach of contract because the TMS failed to do the job as advertised. It’s seeking $3.1 million in damages.

MercuryGate has denied that claim. In response, the software company is alleging that J.B. Hunt contracted it for an off-the-shelf SaaS (News - Alert) service, before proceeding to request extensive bespoke customization. It said that it spent millions to accommodate those requests—but that J.B. Hunt terminated the relationship unexpectedly and continues to use its software without license.

But that’s not all. MercuryGate also alleges that J.B. Hunt stole its trade secrets in the customization process, later publishing them on the Internet.

MercuryGate is seeking to be made whole, for around $5 million.

This much they agree on: J.B. Hunt originally contracted MercuryGate for the licensing, installation, implementation and maintenance of the software in 2012. From there, the story splinters.

“MercuryGate has failed to timely provide the numerous essential features and functionality required under the agreement, in addition to otherwise failing to perform and provide services as warranted thereunder, and as of the filing of this action the software is virtually useless for all excepting approximately 1 percent of ICS's business,” J.B. Hunt said in its suit.

But for its part, MercuryGate alleges in the counterclaim that J.B. Hunt selected MercuryGate for a “buy-it” solution, i.e., an off-the-shelf software service, as opposed to a “build-it” solution, i.e., creation or refinement of its existing proprietary software. But it hit a snag when J.B. Hunt workers had trouble making the switch to a new platform. The grumbling, MercuryGate noted, led to J.B. Hunt attempting to build specific new features into the software that replicated the legacy functionality that users were used to.

“Switching from one set of features to another…requires buy-in from and/or control of the user community by the decision-maker,” MercuryGate said in the counterclaim. “It is apparent that [information services (IS)] failed to coordinate or communicate effectively with the user community before entering the contractual relationship with MercuryGate….As a result, there was increasing dissatisfaction among the users with the MercuryGate solution because it did not mirror the legacy software.”

After spending $3 million to have MercuryGate make modifications, the claim alleges that J.B. Hunt then sought to leverage its know-how, including its trade secrets and intellectual property, to use in rebuilding the legacy software itself, while at the same time including new-and-improved features and ideas taken from the MercuryGate solution. 

“After obtaining that roadmap from MercuryGate’s trade secrets and intellectual property, plaintiff then improperly terminated the agreement between the parties and is actively and intentionally using MercuryGate’s work product and intellectual property without permission, and for this it should be punished,” the claim concluded.

And further, “Plaintiff has compounded its wrongful conduct by publicly revealing on the world-wide-web MercuryGate’s critical confidential business information, causing MercuryGate long-term and significant damage potentially in the tens of millions of dollars.”

There’s no word of when this might go before a judge, but the game of he said-she said may be just getting started. 




Edited by Maurice Nagle

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