Vancouver, BC / ACCESSWIRE / March 25, 2014 / For Vancouver software developer and entrepreneur Dmitri Lounine, Pro-Suite Software Limited and The Society of Notaries Public of British Columbia have made his life a living hell. After a long battle, that could all be about to change.
Lounine is countersuing ProSuite Software Limited and the Society of Notaries Public of British Columbia, over the development of computer software used for real estate transactions.
“I was initially surprised the notaries public made an unlikely foray into the software development world,” Lounine says. He created the software with fellow developer Dmitry Muhkin. “In doing so, they failed to properly paper the deal and we were unwilling to give up our rights to the software we developed,” Lounine explained.
Canada’s highly skilled software development professionals, research and development capability, labour costs and taxation rates are extremely attractive for investors. In British Columbia, the tech industry has been experiencing a boom for several years. Investors looking at software development in British Columbia are attracted to the talented people, advanced facilities, and convenient access to the world’s markets. The situation has contributed to the existence of more than 6,000 British Columbia companies involved in design, manufacturing, and engineering of wired and wireless communications.
In spite of these circumstances, the picture was not so rosy for the software developers. In 2003, the Society claims to have undertaken the development of software under the name ProSuite, to automate the process for completing real estate conveyances.
Lounine was engaged to develop and code the software with his company, Infokey Software Inc. After years of unsuccessful attempts on the part of the Notaries to obtain ownership of the software, the Notaries sued Infokey, and its principals, in 2010 over a minor incident and complaints about Infokey’s work over two years after the events allegedly occurred and after the Notaries purported to license the software to another party.
The irony is that Infokey did not settle, but launched its own counterclaim as its response to the suit ,claiming copyright infringement. If successful, Infokey’s claim could be worth millions. “We are hardworking immigrants,” said Lounine, who currently works for Microsoft.
The software he co-invented processes tens of thousands of real estate transactions in B.C. each year. The problems stemmed from the fact there was no written contract initially to develop the software, and the inventors worked long hours. Lounine says the Society verbally agreed to enter into a software license and maintenance agreement with Infokey that would govern the Society’s limited license and right to use the Infokey software.
Subsequent attempts on both sides to reach a long term agreement on either licensing or transfer of ownership of the software have failed.
“At one point they withheld our pay to strong-arm us and then the Temporary Licensing Agreement and Infokey were both terminated in September of 2008,” Lounine said. “The lawsuit timing was suspicious, and so was their claim for damages over a message that appeared on software users screens two years prior.”
The pace of the litigation changed dramatically after July 10, 2013, when Do Process LP announced its acquisition of the ProSuite software from the Society. The sale was for $5.1 million and neither Lounine nor Infokey received any money from the sale of their software.
On July 31, 2013, Infokey then sought an order that Do Process be added as a defendant in the Infokey copyright infringement counterclaim. The case is now before the Supreme Court of British Columbia in what has become increasingly contentious litigation. According to submissions made in court last week, an expert witness has concluded that the version of the source code that was sold to Do Process, and which is currently in use, contains extensive source code authored and claimed by Infokey. Lawyers representing InfoKey informed the Court of InfoKey’s intention to bring a Summary Trial application in the near future, seeking a permanent injunction to stop Do Process from using the software.
While it is anticipated that the litigation will be complex, it remains unclear how the Society's own members will perform real estate-related transactions in the future, should Lounine and Infokey ultimately claim victory in the case.
Were ProSuite to be shut down by a permanent injunction, Notaries and others who currently use ProSuite would be left without an electronic conveyancing program.
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