IT WAS always going to be a high-stakes game.
Precision Tracking, the Sydney tech start-up embroiled in an intellectual property dispute with Domino’s over its new app, may be about to give up the battle after a court slapped it with an onerous financial order.
The tiny company has less than three weeks to come up with half a million dollars, to cover the legal costs it will have to pay if it loses the long-running case against the deep-pocketed pizza giant.
If Precision Tracking does not stump up $200,000 as security for Domino’s costs — plus $300,000 for cross-claimant Navman Wireless’ costs — by March 30, the proceedings will be halted.
Director Vlad Lasky declined to comment when asked by news.com.au if he expected to push on with the company’s cross-claims after the court decision last Thursday.
Even if he does manage to raise the cash, the company may be up for an additional security for costs order, Federal Court Justice Alan Robertson said in his written decision.
The court heard that Domino’s expected to spend close to $1 million on the dispute up until the first day of the trial.
Precision Tracking, which employs about eight people, has engaged litigation funder LCM to bankroll its legal battle on a no-win-no-fee basis.
The court found that having the backing of a litigation funder did not preclude the start-up from having to pay a costs order, which its lawyers had opposed.
Domino’s stood to incur significant legal costs in defending against Precision Tracking’s claims of breach of confidentiality and copyright, the court heard, “without there being any real prospect of recovering those costs from Precision Tracking in the event that Domino’s obtains a costs order in its favour”.
The dispute between Domino’s and Precision Tracking has embroiled the warring parties in a media bunfight, with accusations of bullying, cyber hacking and corporate espionage flying in both directions.
It centres on the GPS technology behind the pizza-tracking feature on the Domino’s app, which Precision Tracking claims it invented.
Domino’s was in talks with the start-up to supply it with the software system, but it ultimately went with another provider, Navman Wireless.
Precision Tracking alleges that Domino’s ripped off its technology by reverse engineering the software, a claim the pizza maker denies.
“They breached our nondisclosure agreement and gave confidential information to a foreign company, with whom they made a knock-off of our product,” Precision Tracking alleges on its website.
Domino’s maintains that the GPS technology it uses is “in no way based on or uses the Precision Tracking solution or technology”.
Dominos Pizza expects its full-year profit to increase by 32.5 per cent after a half-year lift.
“Throughout the initial planning stages, Domino’s conducted trials and workings with a number of GPS suppliers to establish the optimal GPS tracking solution suitable to their business,” the company has previously said.
“During this process, Domino’s found the Navman Wireless solution to be significantly superior in all areas to any other potential supplier, including Precision Tracking.”
The Federal Court case was sparked by Domino’s challenge to Precision Tracking’s patents on the software system.
Precision Tracking then countersued Domino’s and Navman, alleging breach of contract, breach of confidence and copyright infringement.
Domino’s has also sued Navman, which has lodged a counterclaim against Precision Tracking.