SAN MATEO, Calif. – March 31, 2008 – SuccessFactors, Inc. (NASDAQ: SFSF) today announced that the United States District Court for the Northern District of California has granted its motion for preliminary injunction against Softscape, Inc. in SuccessFactors' lawsuit against Softscape for false advertising, computer fraud and abuse, trademark infringement, and related claims arising out of the anonymous distribution of a false and misleading presentation about SuccessFactors that was admittedly created by Softscape.
A preliminary injunction is interim relief that can be granted by a court at the outset of a lawsuit when the plaintiff (in this case, SuccessFactors) demonstrates a likelihood of success on the merits and the possibility of irreparable injury from the defendant's (in this case, Softscape’s) conduct, or serious questions going to the merits were raised by the plaintiff and the balance of hardships tips sharply in the plaintiff’s favor. The preliminary injunction here broadens the scope of the temporary restraining order the Court had issued on March 14, 2008 and will stay in place while the lawsuit remains pending.
The preliminary injunction prohibits Softscape from (1) disseminating the presentation to the public or affirming its purported truth or accuracy; (2) disseminating or affirming the truth of various statements in the presentation; (3) representing or implying that someone other than Softscape authored statements in the presentation about SuccessFactors when those statements were authored by Softscape; (4) using SuccessFactors' trade name, trademark or logo beyond that amount reasonably necessary to identify SuccessFactors or its products or services; (5) accessing any computer system owned or operated by SuccessFactors and subject to restrictions on access without SuccessFactors' express written authorization; and (6) disclosing or communicating any information received from such a restricted computer system. The Court also ordered that Softscape deliver a copy of the preliminary injunction to its officers, employees and agents.
The preliminary injunction order did not describe the Court’s reasoning, which will be discussed in a separate order to be entered by the Court later. However, SuccessFactors presented to the Court evidence from its continuing investigation of this incident, as detailed in its reply brief and supporting declarations in support of its motion for preliminary injunction. That evidence suggested that Softscape representatives masqueraded as a prospective customer – New Millenium Shoe (www.newmilleniumshoe.com) purportedly operating out of Puerto Rico – in order to gain unauthorized access to SuccessFactors sales materials and SuccessFactors’ password-protected sales demonstration site. Softscape then incorporated screenshots and graphics from these materials and the site into the anonymous presentation, which Softscape created using a SuccessFactors template containing SuccessFactors’ logo and drafted to appear to have been authored by former SuccessFactors customers as a warning to potential SuccessFactors prospects.
Following SuccessFactors’ presentation of this evidence, Softscape's CEO, Dave Watkins admitted he was one of the authors of the presentation. At the hearing held on March 27, 2008, counsel for Softscape further asserted that Dave Watkins also is CEO of New Millenium Shoe.
Having been granted a preliminary injunction, SuccessFactors will be seeking a permanent injunction, including an order requiring Softscape to issue corrective advertising, along with compensatory and punitive damages and restitution.
A copy of the Court's preliminary injunction order is available here, and SuccessFactors' reply brief and supporting declarations are available here. For more information, please see SuccessFactors’ press releases dated March 12, March 13 and March 14, 2008.
About SuccessFactors, Inc.
SuccessFactors is the leading provider of on-demand employee performance and talent management solutions that enable organizations of every size, across every industry and geography, to achieve high-performing workforces by enabling goal alignment and execution, talent development and planning, and pay-for-performance initiatives. SuccessFactors currently has more than 1,750 customers across over 60 industries, with more than 3 million end users in over 156 countries using the application in 22 languages. Founded in 2001 with offices around the world, the company employs more than 700 people, all passionately focused on revolutionizing the future of work.
For more information, visit http://www.successfactors.com.
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