Two and a half months after TransPerfect filed a complaint (full text available here) in the Southern District of New York against rival Lionbridge and its owner, private equity firm H.I.G. Capital, Lionbridge fires back.
At the heart of the matter is TransPerfect’s claim that Lionbridge / H.I.G. had “acquired trade secrets and confidential information under false pretenses” during the 2017 TransPerfect sale process, and is using the information to “unfairly compete” with TransPerfect. The TransPerfect lawsuit seeks damages and compensation to the tune of millions of dollars.
Motion to Dismiss
Now, Lionbridge / H.I.G. has filed a 32-page motion to dismiss TransPerfect’s suit. A Lionbridge spokesperson said, “TransPerfect’s action is filled with false and meritless claims and we look forward to prevailing in both court and the market.”
As summarized in the New York Law Journal, “Lionbridge and H.I.G. said the complaint offered no support to TransPerfect’s contention that the information it viewed in the bidding process had actually qualified as trade secrets. TransPerfect, they said, had not cited any steps it took to preserve the confidentiality of its data or to establish the value of the allegedly ‘proprietary information.’”
The motion describes as “farcical” TransPerfect’s claim that Lionbridge / H.I.G. participated in the auction only to access TransPerfect proprietary information and to compete unfairly, pointing out that Lionbridge / H.I.G. “submitted six bids, came in second out of 90-plus bidders, and even legally challenged the Custodian’s final decision.”
Choice of Law
Lionbridge / H.I.G. further argued that Delaware law should be applied in the case as “Lionbridge is a Delaware company (and) TransPerfect was a Delaware company during the relevant time period.”
Asked to comment on the motion, TransPerfect CEO Phil Shawe told Slator that “after losing the auction, Lionbridge / H.I.G. proceeded to download thousands upon thousands of TransPerfect corporate documents. What’s ‘farcical’ is their story that this post-auction document raid was made in the spirit of good faith due diligence.”
Slator will provide further updates once the court rules on Lionbridge’s motion to dismiss. In the meantime, our focus remains on the business of language services and the most effective growth models being deployed.
Lionbridge CEO John Fennelly shared his views on the industry’s inflection point at SlatorCon London in May 2019. Next up, TransPerfect CEO Phil Shawe will discuss Managing Complexity at Scale at SlatorCon San Francisco on September 12, 2019.
Correction: an earlier version of this article stated that the motion seeks to change jurisdiction. In fact, the motion seeks to apply Delaware law to Plaintiff’s state law claims (Choice of Law).