Oracle Sues Safeguard

In a 14-page complaint filed in the U.S. District Court for the Northern District of California, Oracle also alleged Safeguard last year defaulted on its licensing deal.

The software vendor alleged Safeguard initially licensed its software for Safeguard Global Services, its solution provider subsidiary, which in turn was supposed to provide software to other Safeguard affiliates. After the default, Oracle alleged Safeguard tried to repackage the software and send it back.

Safeguard Global Services, Philadelphia, is now in Chapter 7 bankruptcy.

Oracle is seeking $2.1 million from Safeguard. The lawsuit comes as Safeguard is working to change its strategic direction to acquire more service- and software-related solution providers. A spokesman for Safeguard, which is the leading shareholder for several solution providers including CompuCom, said the company would not comment on the matter. CompuCom is not mentioned in the lawsuit.

According to Oracle, the dispute began in late 2000 when Safeguard first sought a licensing agreement. By early last year, the companies finished hammering out the pact, which called for Safeguard and Safeguard Global Services to license Oracle software and then distribute it to several affiliates.

Oracle said Safeguard obtained the software but never paid for it. Oracle held Safeguard in default last August and filed the federal lawsuit last month. "Safeguard purported to return . . . all of the software that it had licensed, despite the fact that the license agreement did not permit such a return as a substitute for Safeguard's obligation to pay all of the fees due," Oracle said last October.

As part of the case, Oracle alleged Safeguard actually collected licensing fees from two Safeguard affiliates,Traffic.com and Reslynx,and failed to turn over the money to Oracle. Executives at neither affiliate company could be reached for comment.