A software developer accused by Altech of infringing copyright and stealing trade secrets has denied the allegations and instead filed a cross-claim seeking at least $9.73 million in damages.
Altech Computers has filed suit against Andrew Shelomanov, a software developer who claimed he wrote its business software systems, in the Federal Court.
It alleged that Shelomanov and his company Montez refused to hand over the source code of software that Altech commissioned him to make and update.
Shelomanov denied Altech's claims in documents filed in the Federal Court last month.
Shelomanov claimed that Altech agreed to become a sub-distributor of an adapted version of software Shelomanov created in the 1990s.
Altech would also become a "case study" for the use of the adapted software to help it demonstrate its value to customers, Shelomanov alleged.
Shelomanov said he and Altech director Antony Sheen created a company called System Pro to commercialise and distribute the adapted software
But Shelomanov claimed Sheen "made no attempt to commercialise, promote and market the BMS software in the IT wholesale industry".
Shelomanov claimed that Montez lost "the opportunity to profit from the successful commercialisation of the BMS software".
Shelomanov's company Montez was seeking $6 million for loss and damages caused by contract breaches and another $3.24 million over commercialisation and copyright representations.
Shelomanov also sought personal damages of $490,000 that he attributed partly to taking a reduced salary to work "within the Altech business".
Background
Shelomanov said that he created virtual shopping system (VSS) software in 1996.
He transferred copyright to a company called Montez in August 1997 after first acquiring all its shares.
In court documents, Shelomanov claimed he entered an arrangement with an investor to form a company to commercialise Montez' software assets. The company was called Prosystems.
Shelomanov said he met Sheen around late 1998. He arranged a demonstration of VSS for Sheen, at which point Sheen allegedly expressed an interest in becoming a sub-distributor for the system, if it could be customised for the IT wholesale industry.
Altech would also use the software internally as a "case study" to help it sell the software to its customer base, Shelomanov alleged.
Shelomanov claimed he adapted the product for Altech and made further non-commercial customisations for additional fees.
He claimed that Montez always owned copyright in the product.
When Prosystems was wound up in 2002, Shelomanov claimed that he and Sheen set up another company - System Pro - to continue trying to commercialise Montez' software assets.
Shelomanov alleged that agreements were verbal and that Sheen refused to sign any paper agreements.
Shelomanov also claimed he quit his job to concentrate on System Pro, during which time he became an employee "in the Altech business". But he said he was treated like he "was an independent contractor and a business partner, not an employee".
He denied allegations by Altech that he agreed "to make or develop the BMS Software for the sole or exclusive use of the Altech business".
"The right of Altech to sub-licence the BMS software was limited to the distribution of the software to customers in the IT wholesale industry," defence statements read.
"Shelomanov did not agree to develop nor did he in fact develop the BMS Software under the direction or control of Sheen."
He also denied allegations he disclosed Altech business secrets to third-party resellers, partly because the software did "not contain any trade secrets of the Altech business".
Malicious code
Shelomanov also responded to allegations by Altech that he "deliberately disrupted the operations of the Altech business by writing malicious code into the source code of the BMS software".
He claimed instead that any system crashes were caused by Altech using unlicenced versions of the software.
He also claimed that Altech had "sought to circumvent access control technological protection measures [built into the software] which limited the use of the BMS software to the number of users identified on the license issued by Montez".
"Altech has implemented an external program that regularly resets the status of the BMS software users in the BMS software database," he alleged.
"This process results in the BMS software interpreting the number of active users of the... software as being less than it actually is."
Shelomanov said he had sought payment after the licenses allegedly expired on June 11 this year and that he and Montez "could not be held responsible if Altech continued to use" unlicensed code.
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