First-e settles its legal dispute with Exaltec Software

Internet bank First-e and its holding company, Enba, have settled a landmark intellectual property rights case with a small Irish company, Exaltec Software.

Under the settlement Exaltec retains the potentially lucrative licensing rights to a suite of customer relationship management software and will be able to market it internationally.

Financial details of the settlement were not disclosed but it has removed the threat of closure from Dublin-based Exaltec. It has had to lay off its 17 staff since the legal dispute arose five months ago.

First-e had made a claim to the intellectual property rights of the software, called venture-e. Exaltec developed the software with First-e. Exaltec subsequently issued a counter-suit and the case came before the High Court earlier this week before the settlement was reached on Wednesday.

Exaltec Software is a little-known software company that provides solutions to financial services companies. It is jointly owned by Mr Peter Owens and Mr Rob McCarthy. Prior to the case, Exaltec had engaged the investment houses ABM Amro and TIU to raise almost £10 million (#12.7 million) to develop the company. However, this fell through when the legal dispute arose.

Mr McCarthy said yesterday he could not discuss the case but he confirmed the company planned to seek fund-raising to build up its business and market its software.

"We're just relieved that it [the legal case] is all over. We couldn't have survived much longer," said Mr McCarthy. "We will now contact our brokers and get the fund-raising back on track."

The settlement is a further blow to First-e. It is conducting a major cost-cutting exercise, which will lead to substantial redundancies at its Dublin offices.

Staff were told earlier this week that 90 full-time jobs would be lost. A decision is expected later today and industry sources speculated yesterday that the job losses could be substantially higher. The job cuts are part of a #70 million cost-cutting plan at the firm. They reflect a growing cash squeeze on Internet banks and dot.com companies as investors become increasingly nervous about technology companies' cash-burn rates.

An Enba spokesman said last night that the company could not comment on the legal case due to a confidentiality clause.