Jury Rules Against Altair in MSC Lawsuit

While Altair Engineering lost a critical battle in its on-going copyright infringement lawsuit brought by MSC Software Corp., company officials say its simulation software products will not be affected by the ruling.

MSC Software had filed a suit alleging misappropriation of trade secrets and breach of confidentiality. The six-week trial, held in U.S. District Court in Detroit, culminated this week in a jury finding in favor of MSC Software after two weeks of deliberation. At issue were MSC Software’s allegations that former employees who left MSC to join Altair between the period of 2005 and 2007 knowingly took trade secrets related to its Adams simulation technology and used them as a basis for Altair’s MotionSolve multi-body system simulation product, which is a direct competitor. 

Altair officials said they were disappointed in the verdict and would continue to explore its legal options. “While we respect the hard work of the jurors to hear and rule on what is undoubtedly a deeply technical case, we are disappointed and disagree with the verdict,” a company spokesman said. “This case is not over, and we are continuing to pursue our legal options. Without exception, Altair remains resolute on innovating and investing in our technology to help our customers compete and succeed.”

The spokesman said the commercial availability of MotionSolve would be unaffected by the ruling and that no other Altair products were impacted or involved in the case. “We are continuing to invest heavily in MotionSolve’s technology and formulation, which is significantly different from all other competitive MBD products,” the spokesman said.  “We are excited that this unique technology will permit our customers to solve such problems as optimization of large multi-body systems, and are looking forward to a very bright future for MotionSolve.”

MSC Software saw the jury ruling in a totally different light. “We welcome vigorous competition in the market,” stated Dominic Gallello, president and CEO of MSC Software, in a press release announcing the outcome. “Every company has a right to innovate, but no company should be allowed to misappropriate a competitor’s intellectual property.”

The jury awarded MSC Software a $26.5 million judgment — $26.3 million against Altair and approximately $170,000 to be paid by three of the former MSC employees accused of misappropriating trade secrets. Jurors upheld MSC Software’s claims that Altair had taken source code as well as concepts used to develop the code in addition to finding that the former employees had breached several of the company’s non-solicitation, confidentiality and severance agreements.

The MotionSolve platform delivers modeling, analysis, visualization, and optimization capabilities for multi-disciplinary simulations that include kinematics & dynamics, statics & quasi-statics, linear & vibration studies, stress & durability, loads extraction, co-simulation, effort estimation and packaging synthesis. The software is used extensively in the automotive, aerospace, and general machinery industries, among other segments.

Altair and MSC Software aren’t the only design tool vendors to end up in court over trade secret charges as of late. On March 26, Autodesk filed a complaint in U.S. District Court, Northern California, alleging that China-based ZWSOFT misappropriated trade secrets and infringed on its copyright for its AutoCAD software. Autodesk is seeking that ZWCAD be held liable for the allegations, that any copies of infringing software be reasonably disposed of, along with damages.

While this case is pending, a similar charge brought in Europe by Autodesk against ZWCAD Design and one of its Belgium resellers seemed to go in ZWCAD’s favor. On April 7, a Hague Court found that “Autodesk has not substantiated with documents” the source code misappropriation.