Goleta-based Yardi Systems is jumping back in the legal ring to defend its intellectual property less than a year after settling another high-profile case over its software and services.
Yardi is one of the biggest players in property management software and among the largest privately held companies in the region. In late October, Yardi filed a lawsuit in federal court in Los Angeles against Utah-based Property Solutions International.
The core of the allegations is that Property Solutions illegally obtained a copy of Yardi’s Voyager software so that it could craft custom interfaces with Yardi’s software for Property Solutions customers. Yardi said that it routinely grants access to a standard interface that third-party developers can work with to create add-ons, but alleges that Property Solutions circumnavigated that interface to create its own product for its clients.
“Property Solutions emphatically denies this allegation in all respects and believes that Yardi’s other legal claims are also without merit,” the Utah company said in a statement released on its website in response to the lawsuit.
This case comes a little more than a year after Yardi settled a case with Real Page, a publicly traded Texas firm that makes cloud-based property management software. That case started with allegations that Real Page was improperly hosting Yardi’s software in its own cloud and offering to implement Yardi’s software for Real Page customers. But it devolved into a simmering feud over alleged corporate espionage.
Yardi alleged that RealPage had purchased a consulting firm that specialized in setting up Yardi’s software for large clients. Yardi claimed that RealPage used those consultants to glean passwords that allowed RealPage to infiltrate Yardi’s sensitive support network, where trade secrets about its pricing schemes and the keys to how its software work were held. Yardi said it had evidence that “the Vault” — its innermost sanctum of corporate information — was accessed from IP addresses belonging to RealPage offices.
RealPage, in response, fired back that Yardi hired away its chief information officer to build out Yardi’s own cloud-hosted system and that Yardi tried to strong-arm clients into sticking with it rather than defecting for newcomer RealPage. The Texas firm was forced to walk back many of those allegations before the two sides began settlement talks.
In the end, Yardi scored what appeared to be a victory. It won $2 million in sanctions against RealPage and a court order for RealPage to cease hosting and implementing Yardi software. The settlement did allow RealPage to continue hosting Yardi software for existing customers for five years and compelled each company to grant each other licenses so their software would work together for common clients.
In the new case against Property Solutions, Yardi said in its complaint that the Utah company “has never had any license agreement, or been otherwise authorized, to use or access the Voyager software.” Despite that, “Yardi became aware of certain developments in Property Solutions’ custom interfaces which suggested that Property Solutions was accessing, infiltrating, extracting, or otherwise using the Voyager software and code and other Yardi proprietary information to develop and maintain those interfaces,” Yardi wrote in its complaint.
Yardi alleges that the Utah firm could not not have built its interface without using pilfered Yardi code to debug and test it.
Moreover, Yardi alleges that it has evidence at computer with an IP address associated with Property Solutions’ offices tapped into the Yardi network, confirming that the company had an illegal copy of the software on its computers.
In its public statements, Property Solutions paints a starkly different picture. The company said that as third-party tools like its own began to out-compete Yardi’s offerings, the Santa Barbara firm clamped down its software, limiting the ability of third-party developers to work with it.
“During this period, Property Solutions observed that Yardi began to implement tactics we believe were designed to prevent its customers from freely integrating with third parties,” the company said in a statement.
NO FORMAL RESPONSE
Property Solutions has not yet filed a formal response to Yardi’s allegations. But in its statements, it said that it developed the product in question, Entrata PaaS, without lifting from Yardi’s work.
“In our opinion, this lawsuit has everything to do with Yardi attempting to intimidate, restrict, and eliminate competitive and alternative options in the marketplace. Property Solutions affirms unequivocally that not one interface or component of Entrata PaaS was copied from any Yardi software. Property Solutions is certain that it will be vindicated in a court of law and in the marketplace because innovation and fair competition — not litigation — will bring the most benefits to all users of property management software,” the company wrote.