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i2 Technologies files lawsuit against SAP

Supply chain management software vendor i2 Technologies filed a lawsuit claiming software patent infringement of sales and manufacturing product planning and tracking technology.

Supply chain management vendor i2 Technologies Inc. filed a lawsuit today alleging that SAP infringed on seven of its software patents.

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The lawsuit was filed in the United States District Court for the Eastern District of Texas.

The lawsuit names seven patents awarded to Dallas-based i2 between June 9, 1998, and August 1, 2006. The patents cover a model for process planning in a supply chain network. The patents also were awarded for managing factory planning systems, tools for negotiating and tracking the sale of goods, software for allocating manufactured products to sellers, and methods for managing and allocating manufactured products to sellers.

"We believe that it is critical to protect our patented innovations, and accordingly took these actions today against SAP," Michael McGrath, president and CEO of i2, said in a statement.

An SAP spokesperson declined to comment about ongoing litigation.

While i2 competes with SAP, Oracle, Manhattan Associates and Infor in the supply chain management market, many of its customers also run SAP or Oracle software, said Beth Enslow, senior vice president of enterprise research at Boston-based Aberdeen Group.

Enslow said that i2 clients in the consumer goods, chemicals and pharmaceutical industries are mainly SAP customers, and these are areas where SAP holds a large share of the market.

She added, "i2 is competing to solve the most complex problems, and optimization approaches are core to their success."

Customers of i2 tend to be looking to use the supply chain as a competitive advantage, Enslow said. Many customers are conducting business globally in multiple retail and business channels.

The supply chain market underwent a period of consolidation in the late 1990s and early 2000s, Enslow said, and i2 was one of the companies that emerged from upheaval and began focusing on the high-end market. The company has struggled financially, she said, but has enjoyed several good quarters.

"They've gone from trying to be everything to everybody to being a best-of-breed vendor," Enslow said, "and it's beginning to play well for them."

SAP released version 5.0 of its mySAP SCM software in March. The new features enabled manufacturers to plan and schedule transactions and maintain the planning environment. Collaboration capabilities were added and updates were made to the Advanced Planning and Optimization, Inventory Collaboration Hub, Event Management, and Warehouse Management modules.

SAP said it has more than 13,000 active mySAP SCM customers in different vertical markets. In addition, the software vendor said it has more than 1,800 customers that are using advanced planning, optimization and collaboration tools in conjunction with mySAP SCM. About 800 customers are live with SAP APO.

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