Hewlett-Packard Accused in Lawsuit of Taking Unfair Advantage of a Certified Service - Disabled Veteran-Owned Small Business

MicroTech says in federal lawsuit filed today: "You can't keep both the $16.5 million paid AND the product that was never delivered --what's fair is fair."

San Francisco, Ca. (May 18, 2015) – In a lawsuit filed Monday with the United States District Court for the Northern District of California in San Francisco, Virginia technology company MicroTech accuses Hewlett Packard (“HP”) and the software maker it now owns, Autonomy, of unfairly taking advantage by refusing to return $16.5 million in cash paid to Autonomy for software never delivered in a fashion where it could be re-sold. 

MicroTech is a federally certified Service-Disabled Veteran-Owned Small Business. “Just because HP is a big company with billions in revenues doesn't mean it can bully a small business owned by a veteran into not demanding our money back for something never delivered,” said Tony Jimenez, Chairman and CEO and sole owner of MicroTech. 

During a national telephonic press conference held today, Lanny J. Davis, a Washington, D.C. attorney advising MicroTech, described the core allegation in the breach of contract case filed against HP today succinctly: 

“Regardless of whether HP was defrauded by Autonomy, or whether HP’s over-payment for Autonomy was a product of a possible due diligence failure, in my opinion, HP is not entitled to keep both MicroTech’s money AND Autonomy’s software that MicroTech duly purchased,” Davis said.

Autonomy was purchased by HP in 2011 for $10.3 billion and is now known as HP Autonomy. HP insists that it can keep more than $16.5 million paid by MicroTech to Autonomy for software products never delivered. And yet HP refuses to provide the software in return for the money MicroTech paid.

If HP is willing to allow MicroTech to re-license the software for a reasonable period of time, CEO and owner Jimenez says that no lawsuit would be necessary. “HP may think because they are so big they don't need to negotiate a reasonable and fair solution,” Jimenez said. “Well, they will someday realize they were wrong - we are confident a court will agree, the money or the software -- you can't keep both -- under the law and principles of fairness.”

MicroTech's suit is primarily based on two transactions where MicroTech, as a commercial reseller, paid Autonomy more than $16.5 million for certain software. Autonomy not only failed to deliver the software, but kept the money as well. 

The first transaction occurred in early-2010. Autonomy misrepresented to MicroTech that it had a deal in place with the Vatican Library as an end-user for Autonomy’s software. The software was to be used for the Vatican Library’s manuscript archiving project

On March 31, 2010, MicroTech issued a purchase order to Autonomy for the Vatican Library transaction in the amount of$11,550,000. Autonomy then invoiced MicroTech for the same amount. In total, MicroTech paid Autonomy $9,221,331.71 on the Vatican Library deal, with the final payment made on July 1, 2011. MicroTech did not pay the remaining balance after it later became clear that there were issues with the Vatican Library deal and it was not going to close by the date MicroTech was originally promised.

In March 2014, MicroTech formally learned that the Vatican Library had contracted with another software vendor for its manuscript archiving project. To date, MicroTech has not received any money back for the failed Autonomy/Vatican Library transaction, nor has Autonomy delivered the software purchased by MicroTech or the license keys needed to activate the software.

The second transaction took place in June 2011. Autonomy again misrepresented to MicroTech that it had a deal in place with an end-user for Autonomy’s software – this time with HP, prior to HP’s acquisition of Autonomy. On June 30, 2011, MicroTech issued a purchase order to Autonomy for the HP, as end-user, transaction for $7,350,000. Autonomy then invoiced MicroTech for the same amount, which MicroTech paid in full on August 16, 2011. Much like the Vatican Library transaction, however, the HP as end-user deal never closed.

As with the Vatican Library deal, to date, MicroTech has not received any money back for the failed Autonomy/HP, as end-user, deal, nor did Autonomy deliver the promised software and license keys needed to activate the software.

This is in reference to case number 3:15-cv-02220 MicroTechnologies, LLC v. Autonomy, Inc. et al that has been filed today in the U.S. District Court for the Northern District of California.

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