EBay Abandoned Partnership, Fair Isaac Says

MANHATTAN (CN) - EBay walked away from a strategic partnership with Fair Isaac, and refused to pay it millions of dollars in owed fees, the credit-scoring titan claims in court.

The complaint filed Tuesday in Manhattan Supreme Court is the Top Download today for Courthouse News.

At issue is an agreement Fair Isaac, better known as FICO, allegedly reached with eBay on March 21, 2014, to create a joint computer system for their companies. The system was based on a shared revenue model, a marketing and e-commerce system that eBay could sublicense to its clients, and a new data-management system for eBay, according to the complaint.

In short, it was a hookup intended to "leverage each other's current market position, unique offerings, and brand image," Fair Isaac says.

But eBay "unilaterally and without any basis stopped providing services and cooperation, and stopped paying for ongoing work, in violation of its contractual obligations," according to the complaint.

A spokesman for eBay declined to comment on the case.

Fair Isaac claims that there were problems with parts of the performance of the contracts from the very beginning due to eBay. Among other things, it says, eBay imposed frequently changing requirements ... which were improperly defined and failed to provide adequate staffing to perform its part of the work, causing numerous delays to the project.

By the early summer of 2015, the complaint says, eBay had removed all of the main staffers who were working with Fair Isaac, causing performance on that part of the related software and services agreement to be completely abandoned.

Then, in July 2015, eBay declared that it was selling off the business department tasked with carrying out the partnership to a group of investment companies. Shortly afterward, on Sept. 4, 2015, eBay told Fair Isaac that it was abandoning another phase of the software project because the buyers were not interested in moving forward.

According to the complaint, EBay then refused to pay Fair Isaac all the money owed under the partnership agreement, including payment for tens of thousands of hours spent by FICO personnel on a variety of tasks, including coding and programming.

The company says eBay's abandonment of the partnership caused it to suffer an unfair loss of business opportunities and prospective business advantage because it was prohibited from pursuing other partnerships by exclusivity provisions in its agreement with eBay.

Fair Isaac is seeking $45 million in damages.

It is represented by Adam Schlatner of the firm Cozen O'Connor.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit