Mad Mobile Inc. sued the Grand Rapids, Mich.-based grocer and filed a complaint with the U.S. District Court for the Western District of Michigan. The complaint contained the following claims against Meijer: breach of contract, misappropriation under the Federal Defend Trade Secrets Act, and trade secret misappropriation under New York common law.
The tech company also wanted a preliminary injunction against Meijer, but the case was dismissed earlier this month in favor of Meijer’s motion to compel arbitration to resolve the dispute.
Mad Mobile has accused Meijer of being a shady partner during the development and implementation of the self-checkout technology.
According to court filings, Mad Mobile says Meijer hired a huge internal team with the goal of learning the software so it could take over on its own. Furthermore, the grocer allegedly coaxed the software company to divulge its know-how and secrets and Meijer terminated the partnership with Mad Mobile on pretextual reasons. Mad Mobile says Meijer’s internal team is continuing to use and build out the software.
Mad Mobile further claims it hired 38 people to develop the software and had to constantly make changes that cost $1 million a month, which was more than twice the revenue provided by Meijer.
The software company also says Meijer wanted to become joint owners and in March proceeded to terminate the company from the project. Mad Mobile also alleges Meijer shared information with third-party software developers.
Meijer claims it never received the software that was required and that the one provided by Mad Mobile contained bugs, was not reliable, and did not meet design specifications. Meijer also says it paid Mad Mobile nearly $8.5 million for the software development.
In a Oct. 21 motion to dismiss, Meijer claimed Mad Mobile missed deadlines and repeatedly spent too much money to develop the technology even when the grocer made concessions on both, and that in the end there was not a usable version of the software.