In a complaint originally filed by SuccessFactors in December, Halogen – which provides employee performance management software – was accused of creating a fake client, called The Magnus Group.
Although Halogen filed to dismiss the lawsuit in April, the company has now agreed to pay San Mateo, Calif.-based SuccessFactors an undisclosed settlement, to destroy data it obtained through this arrangement, and to undertake employee training to prevent the same incident from happening again.
"Specifically, Halogen manufactured a phony prospective customer, 'The Magnus Group,' to inappropriately obtain SuccessFactors' business information to learn about SuccessFactors' services and product features, product demonstrations, pricing, and sales processes," read a joint statement released by the two companies.
"SuccessFactors has been extremely concerned about safeguarding its confidential information, so we're pleased to have successfully resolved this matter of nearly seven months," added Doug Dennerline, SuccessFactors' president, in a statement.
According to documents filed by SuccessFactors in the U.S. District Court for the Northern District of California, last July a woman named Anna Rodriguez contacted SuccessFactors, saying she was from The Magnus Group.
She claimed to be a human resources director and added she wanted more information about SuccessFactors' performance management software.
After receiving a three-hour demonstration on Aug. 12, she then asked for "non-public information" such as how long training would take, pricing, delivery and course types, information that SuccessFactors subsequently provided by e-mail.
After Ms. Rodriguez wrote back Sept. 16 saying she changed her mind, SuccessFactors tried to contact her and later claimed it discovered Magnus' website had disappeared, its address in Valparaiso, Ind. pointed to a vacant property, and that her phone number connected to an automated message.
SuccessFactors further said e-mail headers from Ms. Rodriguez showed an IP address that is registered to Halogen, and that negotiations stopped before Halogen’s annual user conference in September 2010.
"Not coincidentally … (the) conference featured Halogen's 'performance management' and 'talent management' solutions that directly compete with SucessFactors," the initial complaint read.
Ten-year-old Halogen employs around 200 people in Ottawa. Some of its 1,500 clients include Mount Sinai Hospital, SNC-Lavalin, Quaker Chemical and the San Diego Zoo.
