Kennewick inventor battles Battelle in court

By John Trumbo, Herald staff writerAugust 3, 2009 

About six years ago, Phil Pulver of Kennewick got to thinking about how hand-held electronic devices, such as cell phones, could be made to do what desktop computers do.

So he approached experts at the Pacific Northwest National Laboratory for some high-tech advice, thinking they could help develop specialized software to open a new door to the next level of technology.

Pulver wanted to take advantage of the Department of Energy's Technical Assistance Program, which PNNL has used since 1997 to help hundreds of other private entrepreneurs.

Pulver -- whose business is Catalogs Online -- and five other software companies he partnered with eagerly waited for PNNL to deliver a product potentially worth millions.

Instead, the computer entrepreneur says he has since spent hundreds of thousands of dollars on a breach of contract lawsuit against Battelle Memorial Institute, which manages the Pacific Northwest National Laboratory for the Department of Energy.

Pulver calculates his legal costs at $300,000, while DOE has spent nearly $750,000 paying Battelle's defense costs.

Instead of valuable software, what he got was worthless, he claims in the lawsuit filed in 2005.

The suit, which is before Chief U.S. District Judge Robert Whaley in Richland, contends Battelle gave Pulver nonfunctioning software, then took his concept and marketed it commercially as its own.

Pulver claims he has discovered that while PNNL staff were telling him the software was in the test mode and not ready for release, they were demonstrating a functional version to prospective customers, including Ecolabs, a Fortune 500 company.

The lawsuit appears headed for a jury trial. The judge wants Battelle and Pulver to agree by Aug. 10 on a trial date.

"We have said since the beginning there is no factual basis for his allegations," said Greg Koller, Battelle spokesman. He noted 18 of 19 claims have been dismissed as "without merit and without any legal or factual basis."

The remaining claim asserts PNNL did not deliver its "best efforts" in developing the software for Pulver.

He says the case boils down to a few key points:

-- Battelle was to develop the software to his specifications. Then after proving it was functional, Battelle gave him an unworkable version.

-- Battelle took the functional software and eventually developed a version that was integrated into a contract to do the Radiation Portal Monitoring Project for the Department of Homeland Security.

-- Battelle billed the Department of Energy for the work it did under the Technical Assistance Program to benefit Pulver and his partners, but didn't deliver a usable product.

-- Battelle allegedly revised software code it created for Pulver and passed it off as a new creation in applying for a new patent.

Koller denies there was any impropriety by Battelle or PNNL staff.

"Battelle acted -- as usual -- with integrity, providing Mr. Pulver with a no-cost license to convert technology already developed at PNNL," Koller said.

"In the end, he could not create a marketable product," Koller added.

Documents Pulver obtained from DOE in a Freedom of Information Act request this year show PNNL had $460,787 in internal legal staff costs through 2008; and Battelle's Oak Ridge Operations in Tennessee had another $277,218. Another $7,072 is attributed to PNNL staff scientist Kevin Dorow's required time.

Pulver said statements and documents in the case show that Dorow, the software engineer who worked on the Mobile Data Manager project, had the software working well enough in May 2003 to begin soliciting potential customers, even though Pulver claims Battelle gave him worldwide exclusive rights to the product, all derivatives and updates.

Pulver says the evidence shows PNNL staff enhanced MDM software for the Radiation Portal Monitoring Project in 2004, called it new code, applied for a patent and pursued commercialization.

But Dorow and Battelle's attorney, Miller, in separate declarations claims the Radiation Portal Monitoring Project is a new product with "different functionality" from the product developed for Pulver.

Pulver said what happened to him shows DOE's Technical Assistance Program can be abused.

Koller denied that.

"That is not the spirit of the program or the way we implement it," he said. "The Technical Assistance Program was created for two reasons: To grow and expand the economy and find ways to put government funded technology out to the nation at large."

DOE paid Battelle $42,128 for 486 hours under the Technical Assistance Program for work done for Pulver and his partners.

Pulver claims he and DOE were cheated because the product Dorow delivered was junk.

Dorow told the court in 2005 that the software he worked up for Pulver was imperfect and still in test phase.

Dorow explained in a 2008 court declaration that Technical Assistance Program funding ran out before he could finish his work.

"Though it was not finished or fully tested, the version I had created was the exact version I gave Phil," Dorow said.

According to Koller, PNNL complied fully in applying best efforts.

Delbert Miller of Seattle, the attorney representing Battelle, told Judge Whaley at a November 2008 hearing that Battelle was not required to provide a functional software under terms of the Technical Assistance Program.

Court records also show that when Pulver complained about the nonfunctioning software, Dorow offered to finish the work for $25,000.

In January, Judge Whaley found Pulver's argument sufficient to refuse PNNL's motion for summary judgment.

"(Pulver) has proffered evidence that, if believed by a jury, could support a finding that (Battelle) breached this contract," Whaley ruled.

Pulver "also claims that Mr. Dorow intentionally withheld the workable (software) version and essentially attempted to extort money from (him) for its delivery," Whaley said, adding that Battelle agreed the software as delivered needed work, but was "in fact the only version in existence."

"Resolving this factual dispute requires a determination of credibility," the judge declared.

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