Evidence: Battelle Misused & Defrauded DOE Small Business Technical Assistance Program [TAP] Battelle withheld/pocketed the
DOE-funded working version of the Mobile Data Manager [MDM] software and delivered non-working version [with functionality removed] to Pulver’s small business on 8/29/03 and thus violated the False
Claims Act by keeping MDM software
from government’s designated recipient (Pulver). Battelle kept the working/functional MDM
version, nominated it for awards [e.g., R&D 100], further enhanced [adapting to BlackBerry, RFID…], called “new code”, renamed, marketed commercially, and applied for
patent. [In a 2008 hearing: Battelle
asserted right to deliver “zero...less
than a Barbie doll”, which the judge
called “ridiculous”.] 1. Background In 2002-03, DOE’s Technical
Assistance Program [TAP] funded Battelle-PNNL scientist Kevin Dorow to develop the Mobile
Data Manager [MDM] software for small business owner Pulver who provided the
functional specifications for MDM to Dorow.
Per DOE policy, the TAP agreement [Exhibit
1-4]
obligated Battelle to deliver all the DOE-funded work [Best-Efforts]
to him at completion of the MDM TAP project.
In December 2002, Battelle granted Pulver’s company an exclusive worldwide license to market,
sell and develop follow-on [derivative] enhanced versions of the MDM software in all
commercial fields of use. On August 29, 2003, Battelle delivered a
non-working MDM version [with functionality removed] to TAP recipient Pulver. Battelle documents, examination of MDM source code, and
evaluations by software experts [Pulver & Battelle’s] confirm that
Battelle withheld DOE-funded software code from the version delivered to
Pulver on 8/29/03. Therefore, there are two
sets of TAP-funded 2003 MDM software versions described as follows: 1. Non-working - unfinished, missing functionality, pre-Beta
[low quality] and untested version delivered to Pulver on 8/29/03. 2. Working/Functional - Beta [high quality & tested] MDM versions that
Battelle withheld/pocketed from Pulver, marketed to thers [e.g., Fortune
500], described in management-approved papers as having extensive &
unique functionality [e.g., catalog drilldown search], and nominated for
prestigious technology commercialization awards [R&D 100 R&D
Magazine (breakthrough products)]. Following the summary points and chart, presented is Battelle
evidence consistently confirming that there were the two 2003 MDM versions because Battelle withheld the actual
working “best-efforts” TAP-funded MDM version from Pulver while keeping the
working version. Cited below are excerpts of (a) Battelle’s asserting [to the court]
their right to deliver “zero” to Pulver, (b) Court’s ruling that
there’s enough evidence to justify the case going to trial, and (c) 2003 emails confirming
Battelle was pursuing their “own” MDM licensing opportunities [in violation
of Pulver’s exclusive license] with Ecolabs [Fortune 500 - $3.5B] only weeks
before and after delivering the 8/29/03 non-working version to Pulver who
told the court this was motive for their withholding the working version]. [Note, Battelle named MDM to “PDAC” in 2002; MDM and PDAC are
used interchangeably (PDAC/MDM). In 2005, Battelle renamed it to RDADS.] 2. MDM Versions
Side-by-Side: Summary Chart with Brief Timeline
Events
Timeline Showing Battelle Pocketed DOE-Funded Working/Functional MDM Version
3. Evidence → Two 2003 MDM Versions: (i) Working (Battelle Withheld
& Marketed) (ii) Non-Working (Delivered to Pulver) 3.1 Battelle 2003-04
documents in Exhibit 1-1 confirm that, unlike
Pulver’s 8/29/03 version, the actual DOE-funded working MDM version that
Battelle demoed and marketed to many commercial firms, was high quality
[Beta-tested], contained critical catalog category drilldown functionality
and was nominated by Dorow and management for the prestigious R&D 100
Award [R&D Magazine] for innovative and commercially viable
products: KED-00989 [9/15/03 Email with Attachment: MDMWhitePaper09152003.doc]
[2 weeks after delivering non-working MDM to Pulver] Excerpts: “Mobile Data Manager—White Paper 9/15/03 – Kevin Dorow The MDM Java application enables PocketPC
and Palm users to easily extract and download data from standard databases, spreadsheets...2-way transfer allows users
to upload changes...MDM supports...category level...search
by...catalog-like drilldown.” KED-00069 [12/4/03 Dorow Email
Subject: 2004 R&D 100 Entry
Candidates] Excerpts: “I think that Mobile Data Manager would be a good
candidate based on what’s listed below...Thanks! Kevin... It’s time to select the lab’s candidates for the 2004 R&D 100 Awards. R&D Magazine
sponsors the competition, which honors ...the year’s 100 most significant products. Fortune 500
companies, federal labs...compete for recognition for their outstanding technical developments. DOE holds these awards in high esteem.
Battelle...received more awards than any other recipient!” [R&D web site at http://www.rdmag.com] KED-00074 [12/19/03 Heister Email to Dorow
Subject: R&D 100 Nomination for PDAC/MDM Attach: PDACWhitePaper12182003.doc] Excerpts: “Nice job on this write up. Earl Heister”
[Heister
was the Director of Information Systems & Engineering.] “12/18/03 PDAC supports...category level...real-time handheld
catalogs. The Pocket Data Access Components [PDAC] software currently exists as an advance prototype (beta software) and has been
demonstrated to several external clients. The software has been licensed in its current state to a local
company called Mobile Data Methods (operated by Phil Pulver). We are also pursuing future development and licensing with other
external partners including…Ecolabs / Neotech – A demonstration...in late
spring of 03. They were so impressed… If the pilot goes well, the software
will be deployed to all Ecolabs sales staff worldwide...users can search by
catalog-like drilldown” KED-00880 [2/24/04 Email] [Re:
2004 Article from Newsletter on Mobile Data Manager] Excerpts: “The Mobile Data Manager [MDM]...supports...category
level [drilldown]...impact on a wide
variety of marketing segments: Sales force automation–Providing real-time
handheld catalogs, remote ordering...(beta software)...demonstrated to
several...has been licensed to...Mobile Data Methods (operated by Phil
Pulver). We are also pursing future
development and licensing with other external partners.” 3.2 All those who tested
the 8/29/03 MDM version, including Battelle’s expert, confirmed the version
crashed and didn’t work; Exhibit 1-6 includes test results
of outside experts and 2008 expert testimony of Battelle’s Dr. Gorton.
Further corroborating that the 8/29/03 version didn’t work is MDM developer
Dorow who delivered the software to Pulver; excerpts of his July 2008
declaration [Exhibit 1-2] confirm that the
8/29/03 version was unfinished, had “problems” running and was low quality
[pre-Beta]. Obviously, this non-working and unfinished version wasn’t the MDM
version that Battelle nominated for an R&D 100 Award, received
enthusiastic response [to demos] from Ecolabs et al., and described in white
papers as high-quality [Beta-tested] with robust functionality, e.g.,
catalog-like category drilldown search. In summary, Battelle’s Dorow now
concurs that Pulver’s 8/29/03 version didn’t work; at the same time,
Battelle-Dorow documents in Exhibit
1-1
confirm there was a working MDM version. Note: As cited above,
Battelle admits to the court that it demoed an operable & functional MDM version to Pulver
on Battelle-PNNL premises in May 2003, three
months before Dorow delivered an MDM version that he now admits doesn’t work. 3.3 Dorow’s April-May 2003
timecards for his developing drilldown [Exhibit
1-5A],
August 2003 TAP reports to DOE [Exh.
1-5A
(drilldown)] and two versions of the MDM main control panel file [Exhibit 1-5B (IdentifyFields.java)]
confirm that he withheld the DOE-funded drilldown code/functionality from the
8/29/03 version. He delivered two versions of the MDM control panel to
Pulver, dated 4/14/03 and 6/30/03. From late-April to May 2003, Dorow charged
DOE to develop drilldown; his August TAP report [Exhibit 1-5A (GES-00202)] confirmed
this: “The coding required to support a “drill-down” mechanism on both
the administrative application server component...was completed... modifications and additions
to the web pages of the administrative application”. The 6/30/03 version should have the new drilldown functionality,
but doesn’t. [Exh. 1-5B shows the 6/30/03
version had no changes or additions to the 4/14/03 file.] Instead, on
8/29/03, Dorow delivered the 4/14/03 administrative control panel file
[Re-dated 6/30/03] and withheld the file with drilldown functionality that
DOE paid Battelle to develop for TAP recipient Pulver. [In his 6/30/08 MDM
declaration to the court, Pulver noted Battelle’s withholding this
government-funded work from its intended recipients violates the False
Claims Act.] Further showing that drilldown functionality is missing from the
8/29/03 MDM version is a simple text search that didn’t find the words “drill”,
“drilldown”, “level”, and/or “category” in the administrative control panel
file; no drilldown mechanism whatsoever is in the control panel source code
file. Finally, attached in Exhibit 1-5C are administrative
control panels from the 2005 RDADS software patent application [published
March 2007] and the 8/29/03 MDM version. These control panels are virtually
identical, except that RDADS has the drilldown mechanism that’s
missing from Pulver’s 8/29/03 version. [Note, Battelle documents confirm
MDM/PDAC was renamed to RDADS in February 2005; details in the Derivative[RDADS=MDM] Section.] Note: In his July 2008 declaration,
Dorow cited absolutely no evidence to refute that Battelle withheld catalog
drilldown and other TAP-funded software functionality
and code from Pulver’s small business when it delivered the 8/29/03 version. 4. DOE-Funded Counsel Miller Statements to Court: Battelle claims right to deliver “zero” to TAP recipient Pulver. Excerpts of the court transcript [11/18/08 hearing] of
Battelle’s motion to dismiss the case are below. Exhibit 1-3 cites other excerpts
of Battelle’s actually asserting the right to deliver “zero”, “less than a Barbie
doll”, and an unworkable MDM
product to
TAP recipient Pulver, despite admitting that MDM worked three months
earlier! These assertions further
confirm Battelle evidence of delivering a non-working MDM version while
keeping and marketing the working best-efforts version for their commercial
[non-DOE] interests. The following
excerpts and his ruling [next section] clear show that the judge rejected
Battelle’s arguments that “Barbie doll software” or “zero” met the
best-efforts provisions of the DOE Technical Assistance Program:
5. Court Denies
Battelle’s Motion to Dismiss - Rejects Battelle’s asserting the right to deliver “zero”
to Pulver. On January 29, 2009, Chief District Judge
Whaley rejected DOE-funded counsel Miller’s argument that the TAP and MDM
License Agreements allowed Battelle to withhold the Best-Efforts
[working/useful] version developed & funded via the DOE Technical
Assistance Program. “Under Defendant’s theory, Plaintiff was not contractually
entitled to expect to receive any useful version of MDM because Plaintiff had expressly
accepted the product “as is.” [Page 14, lines 14-16] “Construing the
contract as a whole, including the TAP Agreements, the Court finds that
Defendant promised to exert its best efforts to develop MDM and to turn over to
Plaintiff the results of those best efforts – workable or not” [Page 14, lines 18-21] “Plaintiff has proffered evidence that, if believed by a jury,
could support
a finding that Defendant breached this contract. Plaintiff claims that
the version was inferior to a workable version Defendant previously
demonstrated for him. Plaintiff also claims that Mr. Dorow intentionally withheld
the workable version and essentially attempted to extort money from Plaintiff for its
delivery...Resolving this factual dispute requires a determination of
credibility and, therefore, summary judgment is inappropriate.” [Pg. 14, lines 24-28
& Pg. 15 lines 1-6] 6. Motive to Withhold
Working MDM Version [Battelle’s Competing Ecolabs MDM Licensing Opportunity – June–Dec.2003.] [For more details, see also Battelle/Ecolabs
2003 MDM emails when Battelle delivered non-working version to Pulver’s small
business on 8/29/03.] Documents reveal that, at the same time Pulver received a
non-working MDM version, Battelle itself was pursuing a major commercial MDM
sales/licensing opportunity with Fortune 500 Ecolabs that pertained to
handheld/mobile catalogs with category drilldown search, key functionality
missing in the MDM version delivered to Pulver. These catalogs-on-handhelds
would be adopted by its worldwide sales force and accrue significant fee
income to Battelle as Ecolabs would purchase thousands of MDM software
licenses and Battelle corporate [1831] consulting. Catalog drilldown was a critical
requirement due to their extensive products with detailed documentation. Three
sets of Battelle documents excerpted below confirm that MDM/PDAC developer
Dorow and other Battelle staff were
actively pursuing this major MDM sales opportunity with Ecolabs at the very
time Pulver received a non-working MDM version on 8/29/03 that lacked catalog
drilldown functionality which Dorow certified to DOE-TAP as completed for
MDM. Specifically, the following
documents reveal material events occurring within days of the 8/29/03
delivery: 1.
Battelle’s
MDM developer Dorow’s Official Lab Record Book confirms catalog drilldown
search functionality was critical to
the Ecolabs MDM licensing sales opportunity. These excerpts of documents in Exhibit 1-7A confirm this: a. KED-01387 –
7/29/03 Dorow’s Lab Record Book:
“Ecolabs visit…They would like to be able to click
on a image or object in an image) that
indicates category and drills into a list of products that
are applicable...then drill into the details for each product.” b.
KED-01387 – 8/6/03 Dorow’s Lab Record Book: “Ecolabs sees this as a real-time production
system-this means it is a profit generating mechanism...sales automation
interface...not
been able to identify any competitors in the market.” c.
KED-00687 – 8/6/03 Email [Pulver to Dorow]:
“Kevin...The mobile catalog feature
[e.g.,
Dixie] is perhaps the most unique aspect of this software; any company can put their
entire catalog on the handheld.” 2.
Battelle signed
non-disclosure agreements [NDA] on MDM with Neotech/Ecolabs one week after delivering the
non-working 8/29/03 version. [MDM was exclusively
licensed to Pulver.] Document excerpts [Exhibit 1-7B]
confirm this: a.
MLG-00829 – 6/30/03 Email [Subject: Neotech
NDA & Ecolab Proposal]: “They are
also wanting to move on the licensing of the mobile data manager, so I need to know
where we are on getting the agreements for tech transfer” b.
KED-00666 – 7/8/03 Email [Subject: NDAs]: “Battelle will be providing Neotech/Bandwiz with details on the internal design
for...Mobile Data Manager...as we work joint proposals or licensing of these
technologies.” c.
KED-00718 – 9/8/03 Email [Subject: NDA with Neotech[Ecolabs]]:
“This
agreement has been fully executed.” 3.
Two
weeks before the 8/29/03 MDM delivery to Pulver, Dorow and Battelle
commercialization managers submitted an
investment proposal to
customize MDM for Ecolabs opportunity.
Excerpts
from Exhibit 1-7C are as follows: KED-01011 – 8/15/03 Email [“Investment Proposal
Kevin Dorow...The proposed project will build on the existing Pocket Data Access
Components [PDAC/MDM]
platform...Research and current marketing efforts indicate significant and increasing demand by
organizations for deploying corporate or organizational information to the
field via mobile devices Ecolabs
(http://www.ecolab.com)--a $3.4 billion environmental firm, has an existing
need for this type of product...This technology has commercialization potential
in a large number of vertical market segments including medical, sales
force automation, emergency management, industrial process, and law
enforcement...Ecolabs is proposing to use this technology in...automation of
their sales force. The following gross returns have been estimated by the
pilot alone: 5 administrative server licenses at $500 per server - $2,500 1500 handheld device deployments at $40 per
handheld - $60,000 3 months of 1831 contract business to adjust
the base product ($120/hour) - $64,000” Note: See other
Battelle/Ecolabs 2003 MDM emails during the time Battelle delivered a non-working
version to Pulver’s small business. Cited below, Pulver told the court that this evidence [showing
conflict of interest] suggests motive for withholding the TAP-funded
best-efforts working MDM version from Pulver and keeping the viable version
for commercial opportunities [Use-Permit] that are more profitable than work
for DOE. Their acknowledging that Ecolabs was impressed with MDM in spring
2003 is in stark contrast to Pulver’s 8/29/03 non-working version that
Dorow’s 2008 declaration described as having problems even running and was
untested. This further confirms
that the 8/29/03 Pulver version is NOT the one Battelle was demoing/marketing
to Ecolabs [signed NDA] and other commercial firms in 2003 and is NOT the
working and functional version demoed to Pulver in May 2003 as Battelle now
admits. 7. Conclusion The following excerpt of Pulver’s 6/30/08 Declaration
[Crt. Doc. #220 - Part 1], further supported by Battelle’s Nov. 2008 assertions
to the court [i.e., right to deliver “zero” and “less than a Barbie doll” to
Pulver], summarizes the
evidence information presented above: “Battelle had the means, opportunity and motive to 1) withhold
the DOE-funded MDM functionality for “their” MDM version to pursue Ecolabs
[et al], and 2) deliver a non-working dysfunctional MDM version to prevent
Pulver from being a “competitor” to
their profitable 1831 corporate business involving MDM and derivatives. Based
on extensive discovery documents and 2008 testimony ...Battelle “pocketed” DOE-TAP work
[research], withheld it from the 8-29-03 MDM version, deprived it from the
intended TAP recipients, nonetheless accepted payment from the Federal
Government for this work, and hence violated the False Claims Act [31 USC §3729].” [Note: 1831 is Battelle’s
unique Use-Permit allowing them to do lucrative private work using government
facilities.] Note: Battelle never produced ANY documents refuting
the extensive evidence proving that they withheld the DOE-funded working MDM version(s) which they admit demoing three
months before delivering the non-working version to Pulver on 8/29/03.
The judge agreed and denied Battelle’s 2008 Motion to Dismiss. In July 2010, Pulver told the judge that Battelle’s misrepresentations
[perjury] had corrupted discovery and the jury would be thus denied evidence
that Battelle is withholding. In August,
the Court enabled Pulver to seek remedy with the 9th Circuit Appeals Court by
dismissing the case on the very same evidence proffered in 2008 in which the
judge ruled that evidence, if believed by a jury, could support a finding that Defendant [Battelle]
breached this contract. |
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