A developer of product data software alleged Tuesday that a leading maker of cutting tools and other components stole its trade secrets and failed to pay commissions on more than $1 billion worth of transactions.
MachiningCloud said that its lawsuit, filed in Ventura County, California, seeks $330 million in damages from Kennametal and asks the court to shut down the latter company’s “knockoff system and platform.”
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MachiningCloud officials said in a statement that it had entered into a contract with Kennametal to build a proprietary sales platform known as “Novo,” but alleged that Kennametal utilized MachiningCloud’s intellectual property and other confidential information to build a competing platform instead.
MachiningCloud officials added that the company had made repeated attempts to reach “an amicable resolution,” but was forced to take “the steps necessary to protect our company.”
“We believe this is a simple case of a large company trying to take advantage of a smaller company by stealing its trade secrets and contractually protected confidential information and then refusing to pay commissions it clearly owed,” the company said in the statement.
A Kennametal spokesperson told Industrial Distribution in an emailed statement that the company had received notice of the complaint and believes it to be “entirely without merit.”
“We will continue to assess the claim and vigorously defend it. Beyond that, we have no additional comment as this is active litigation,” the spokesperson said.
Kennametal on Wednesday reported results for its fiscal second quarter, including $482.1 million in sales and $17.9 million in net income. The revenue total reportedly fell short of Wall Street projections.
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