Can Transperfect save Worldlingo? is the title of a post I wrote last week about Transperfect’s acquisition of Internet translation company Worldlingo. Alex Buran, CEO of Translation Services USA, enlightened us with the following comment on my post.
Most likely Transperfect is buying patents. They are in the middle of a lawsuit with Motionpoint and perhaps, need more substance to win the case.
(Read more here) http://news.priorsmart.com/transperfect-global-v-motionpoint-l4tL/
Worldlingo has many patents related to online ordering systems and website translation.
I did not know of this lawsuit and it sheds a whole different light on the deal.
In reading over the lawsuit, I found the timeline to be interesting. Transperfect had bought the patents from Worldingo almost one year ago. They filed suit against Motionpoint in January, 2011. The patent infringement complaint filed in California is dated September, 2011. But the Worldlingo deal was only announced in November, 2011. Why did it take so long for Transperfect to announce the Worldingo acquisition deal? Did they initially just buy the patents and only then decide to buy the whole company? Did the due dilligence on the deal take that many months to complete?
Another very interesting point: in its complaint, Transperfect has laid the legal groundwork to sue end customers for using Motionpoint website translation technology. Some of the companies named in the complaint are Pizza Hut and Best Buy.
One thing is for certain: this is a dirty fight started by Transperfect over control of the website translation market in the USA. Motionpoint is one of the fastest growing companies in the USA and is handling website translation for many of the largest companies (Fortune 500) in the country. Read an interesting interview here by Will Fleming, Motionpoint CEO who describes Motionpoint technology in basic terms.
Transperfect obviously wants to stop Motionpoint but is apparently losing ground in the fight. So what do they do? Buy intellectual property and start a patent war. TP probably has deeper pockets than Motionpoint and can bleed Motionpoint to death in a lawsuit that will take years to settle. Legal costs will be huge for both sides. In the meantime, Transperfect sales people can tell customers that Motionpoint is in alleged violation of TP patents and that if they choose Motionpoint as their vendor that they too may have to pay Transperfect for patent infringement. So they had better select TP as their website translation vendor. Pretty devious and ingenious, wouldn’t you say? But as the French saying goes, a la guerre comme a la guerre (translation: in war anything goes).
But the ideal end game for Transperfect would be to buy Motionpoint and merge their activity into translations.com. The patent infringement lawsuit would give them an advantage in the negotiation. If TP would buy Motionpoint it would sure give them a dominant position in the USA website translation market. And Transperfect CEO Liz Elting would love that.