Accenture Files Patent Suit Against Guidewire

Anthony O'Donnell reporting yesterday, December 19, 2007, for Insurance & Technology writes:

Yesterday afternoon Accenture filed a lawsuit alleging that San Mateo-based Guidewire Software, a rival in the insurance claims software market, has infringed the U.S. patent protecting the Accenture Claim Components solution and has misappropriated trade secrets related to the design, coding and implementation of the Accenture software. In a preliminary response issued late last night, Guidewire denied the allegations and has followed up with further statements refuting the charges made by Accenture.

An Accenture statement referred to the company's belief that "Guidewire willfully and deliberately developed, manufactured, used and sold ... computer software and services used for insurance claims management that are covered by Accenture U.S. Patent 7,013, 284." Accenture also claims that Guidewire "willfully and maliciously obtained Accenture trade secrets without authorization" as part of an ongoing effort to compete against Accenture in the claims software market.

Accenture's allegations are based on what partner John Del Santo characterizes as good reason to believe that Guidewire had access to Accenture's confidential information. "We carefully compared our U.S. patent to the information available about the Guidewire system and concluded that they not only infringed the patent but that they must have gotten access to our trade secrets at a client somewhere," Del Santo says. "We believe that their product development trajectory was just too fast to result in the kind of product that they have, which looks fairly similar to ours. From our view that's too much of a coincidence, so there has to be a trade secret violation here, in our opinion."

Will this survive a Rule 11 challenge?

Intellectual property suits have been common in the software industry as a whole but not in the insurance software market, according to Light. "This lawsuit is a sign that there is a new front in the intellectual property wars: software that makes insurance companies better at executing their core functions," he comments.

From an industry perspective the Accenture/Guidewire suit is significant for several reasons, according to John MacPete, a patent litigator at Locke Lord Bissel & Liddell LLP (Atlanta). "First, I think it's a notice to the industry that they need to look at their software to determine whether they should have infringement concerns about the 284 patent or, frankly, any other patents that may be out there that are similar in nature to the 284," he comments. "Second, I think it's a notice to companies that either have licensed software or are in the process of licensing software in the insurance space to carefully examine or negotiate for broad non-infringement representations and indemnity language in their contract for third party infringement claims from their software providers."

Read the full article here.