US lawsuit against NetSuite over 'manifestly unusable' software set to be dismissed

It's far more preferable to avoid going to court altogether when you've got a problem with your vendor, one analyst says

NetSuite has avoided what could have been an ugly, image-damaging court battle, having reached an agreement to dismiss a lawsuit brought by its customer SkinMedix over an allegedly unusable software system.

SkinMedix filed suit against NetSuite in May, saying the promises of an "overly aggressive" salesman at the vendor led it to purchase software that ended up being "manifestly unusable."

However, in a court filing last week, the parties mutually agreed on a stipulation to dismiss the suit with prejudice, meaning the charges can't be brought again.

NetSuite hadn't issued an answer to SkinMedix's claims as of the Aug. 1 filing in U.S. District Court for the Northern District of California, leaving open the question of what type of defense it might have mounted.

Neither company responded to requests for comment this week. But the agreement to dismiss the case could mean NetSuite reached a settlement with SkinMedix rather than duke it out in court, or that SkinMedix decided the cost and effort of pursuing a lawsuit wasn't worth the trouble.

Still pending is a suit brought last month against NetSuite by another customer, textile products manufacturer Kentwool. In that case, Kentwool too alleges that it bought NetSuite software based on pledges from company officials that their software could meet its specialized needs.

What exactly went down behind the scenes with SkinMedix and NetSuite doesn't really matter in the bigger picture, said analyst Frank Scavo, managing partner of IT consulting firm Strativa.

"By all means, customers should try to solve these problems short of filing a lawsuit," said Scavo, who has advised clients that found themselves at odds with their vendors.

Many disputes between customers and vendors never find their way to court, Scavo noted. However, "in some cases the only way you can get a vendor's attention is to bring in a lawyer."

"That doesn't mean it's always the vendor's fault," Scavo added. "Sometimes the customer hasn't held up their end of the deal, but the relationship has gotten so sour they don't want to move forward."

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com

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Chris Kanaracus

IDG News Service
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