Court Orders Amazon.com to Pay Basis Technology for Creating Amazon Japan
CAMBRIDGE, Mass., January 11, 2008 — The Appeals Court of Massachusetts has ruled in favor of Basis Technology over online retailer Amazon.com in a complex business lawsuit. In a 24-page decision, a three justice panel sided with Basis Technology on every point of contention. This is now the third time that a Massachusetts court has ruled against Amazon.com in a long-standing dispute pertaining to the establishment of Amazon’s Japan subsidiary and its Japanese e-commerce site, known as Amazon.co.jp.
Basis Technology originally brought suit against Amazon.com seeking compensation for the key management and technology consulting services Basis Technology provided in the development of the on-line retailing giant’s successful Japanese operation. In the midst of trial, the parties reached a settlement agreement. When Amazon later tried to renege on that settlement, the judge upheld the agreement and ruled in favor of Basis Technology. Amazon then appealed.
Amazon.com was an early investor in Basis Technology. As a consequence of the most recent decision, Amazon.com is compelled to relinquish its seat on Basis Technology’s Board of Directors and to relinquish all rights as a preferred shareholder. Basis Technology is also permitted to resume its use of the Amazon.com name and logo in its promotional materials, and will receive additional monetary compensation.
“We’re pleased the court saw things our way,” stated Carl Hoffman, CEO of Basis Technology. “We’re proud of the strategic management and technology consulting services we offer to American firms to drive their businesses in Asia, are happy those services contributed to Amazon.com’s success in Japan, and are now even happier to be compensated properly.”
The wide-ranging services provided by Basis Technology included business plan development, executive recruiting, facilities planning, technology licensing, and software internationalization. Working closely with Amazon.com management in Seattle, the Basis Technology team drove the Japan project to a successful launch on November 1, 2000.
In the words of former Amazon.com CFO Warren Jenson, the business results from Japan were “stunning.” Within one month of launch, Amazon.co.jp had risen to become the #1 online bookseller in Japan, eclipsing established competitors Yahoo!, Bertelsmann, and Kinokuniya. Within one year, Amazon.co.jp had become the #1 online retailer in Japan and Amazon.com’s fastest growing business unit.
Kouichi Matsumoto, a former Amazon employee and author, chronicled the success of Amazon.com’s Japan operation and the leadership role played by Basis Technology in “Amazon’s Secret: How the World’s Largest Internet Retailer Entered Japan”, a book published in January 2005. Amazon Japan recently celebrated its seventh anniversary of operations as Amazon.com’s most successful overseas business operation.
“The ferocity of Amazon’s legal defense in this case highlights the importance of international markets to the world of e-commerce,” continued Hoffman. “Amazon’s strong financial performance in recent years is due in large part to their success in Japan. Rather than continuing to litigate, we hope that in the future Amazon will direct its resources toward replicating this success in the fast-growing markets of China, India, Korea, and Taiwan.”
About Basis Technology
Basis Technology (www.basistech.com) provides software solutions for text analytics, information retrieval, and name resolution in many languages. The company’s Rosette® Linguistics Platform is a widely adopted suite of interoperable components that delivers high performance results to search, business intelligence, e-discovery, and many other enterprise applications.
Top-tier software vendors, content providers, multinational enterprises, and government agencies rely on Basis Technology’s solutions for Unicode compliance, language identification, multilingual search, normalization, transliteration, and entity extraction. Customers include industry leaders Autonomy, Convera, Endeca, FAST, Google, LL Bean, Microsoft, Oracle, SAS, Symantec, and Yahoo! Government contractors include BBN Technologies, CACI, Lockheed Martin, MITRE, Northrop Grumman and SAIC.
Company headquarters are in Cambridge, MA, with branch offices in San Francisco, California; Herndon, Virginia; and Tokyo, Japan. For more information, visit www.basistech.com or call 800-697-2062.