Ottawa's Kinaxis hit with patent infringement lawsuit by U.S. competitor

Stock lawsuit pic

One of Kinaxis’s biggest competitors has filed a lawsuit against the Ottawa-based software company in a U.S. court alleging that Kinaxis infringed on six patents covering supply-chain management technology.

In the suit filed in U.S. District Court, Arizona-based Blue Yonder claims that Kinaxis used solutions invented by its U.S. competitor, allowing the Ottawa company “to circumvent the development process and investment necessary to develop new products.”

In a news release issued Monday afternoon, Blue Yonder said it has invested more than US$1 billion in R&D in the last decade and has in excess of 400 patents granted and pending.

“We have amassed an unrivaled patent portfolio in the area of supply chain technology,” Martin Felli, the company’s chief legal and administrative officer, said in a statement. 

“We will vigorously protect, defend and uphold our unique intellectual property and innovations, while ensuring that customers do not experience any interruption to mission-critical supply chain technology from Blue Yonder during this time.”

Kinaxis responded to the allegations on Monday night, saying it has “no information” regarding the complaint.

“Kinaxis intends to vigorously defend against the claims made by Blue Yonder and consider all appropriate responses and avenues of legal recourse against Blue Yonder,” the company said in a statement, adding it has “developed a high-quality portfolio of patents since its founding in 1984.”

The lawsuit comes as Kinaxis is riding a massive wave of growth during the pandemic. Its shares have nearly doubled in value since late March as customers ramp up use of its platform that helps them keep track of inventory in real time.

The Ottawa company ​– which counts Ford, Nissan and Proctor and Gamble among the major manufacturers that use its software ​– is projecting revenues of between US$220 million and $223 million for fiscal 2020, up from $192 million last year.

Kinaxis chief executive John Sicard, who was named Ottawa’s 2020 CEO of the Year, said recently the firm’s RapidResponse software has become essential for customers scrambling to adjust to wildly fluctuating market forces that have seen some products flying off store shelves while demand for other merchandise has cratered.

“We’ve probably never been more relevant as a company than we are now,” he told OBJ this fall. “It’s only recently we’ve sort of come out of the shadow of other giants, I will say, and people recognize what we’re truly doing.”  

Blue Yonder, meanwhile, is one of Kinaxis’s fiercest corporate rivals. Founded in 1985 as JDA Software, the Scottsdale, Ariz., company rebranded itself earlier this year after acquiring German AI firm Blue Yonder in 2018. 

The privately held company’s 3,300-plus customers include Best Buy, Coca-Cola and Home Depot. On its website, Blue Yonder says it brought in more than US$1 billion in revenues in 2019 and now employs in excess of 5,500 people.

Kinaxis shares were up $1.54 to $177.04 in midday trading on the Toronto Stock Exchange.