Celeritas Responds to Paradigm Lawsuit.

OVERLAND PARK, Kan. -- Paradigm sued Celeritas in March 2007 in a verified complaint signed by their then-president, Mark Allen. Paradigm very publicly announced this suit in a press release distributed by e-mail and over their web site. Celeritas has chosen to remain largely silent during the nearly two years of legal proceedings thus far; however, given some significant developments, Celeritas has determined that it is now time to start publicly setting the record straight.

An Unexpected Visit from Paradigm

Brett Lester, Celeritas' president, received an unexpected visit on the 6th of January from Randy Salyer, a person unknown to Celeritas previously, representing himself as Paradigm's new general manager. The reason for his unannounced visit, Mr. Salyer indicated, was to introduce himself and to let Celeritas know that Paradigm was going to be in business for a long, long time. Brett Lester later commented, "My conclusion was that Paradigm must be reacting to the rumors in the marketplace questioning their financial viability, but I'm astonished that he felt it either necessary or prudent to walk into our office unannounced to deliver that message."

Mark Allen Relieved of His Duties

During his visit, Mr. Salyer indicated that there had been ownership changes at Paradigm and confirmed that Paradigm's long-time president, Mark Allen, had been removed from that position. It was later confirmed that Mr. Allen was involuntarily removed from his position and that he no longer holds an ownership interest in Paradigm.

Celeritas is also aware of a growing list of others no longer employed by Paradigm including Dave Carver, Jeff Davis, and Sam Peter Hopp.

Who Owns the Data?

Paradigm has informed customers through the years that the customers owned the data from their public awareness program. Through the course of the litigation, Celeritas received the contract between Paradigm and Accudata (Paradigm's data provider for address data) and learned that Paradigm's statements appear false. The truth is that the data provided to Paradigm by Accudata was under a limited license and did not convey full ownership of the data to either Paradigm or Paradigm's customers. Celeritas believed it highly inappropriate that any pipeline company might be improperly informed of their rights concerning this data; however, Paradigm had designated the Accudata contract as confidential, meaning that Celeritas could not inform anyone of the contractual restrictions on this data without violating a federal court order governing the lawsuit.

Adding urgency to the situation, Celeritas was informed by an Accudata representative that Accudata has considered sending a cease and desist letter to Celeritas regarding the use of their data, data that had been provided by Paradigm. Given the concern that Accudata might take issue with Celeritas or other users of this data, Celeritas believed it imperative to notify pipeline companies of these risks. To that end, Celeritas filed a motion with the court to have the Accudata contract made public, an effort that Paradigm resisted through the court. Celeritas is pleased to announce that the court granted its request.

If you believe this contract might impact your organization, you can now access Paradigm's Accudata contract at http://www.pipelineawareness.com/Accudata_Contract.pdf. Note especially the section entitled, "Restrictions and Conditions on Use of the Data", where it specifically states, "Customer may not use or permit the use of the data in connection with the preparation, publication, cleaning, or maintenance of any directory of any nature." [Emphasis added.] Perhaps most ironically, given the extensive legal motions required to secure release of the contract, Section 7 of the contract states, "[Paradigm] shall, whenever reasonably possible, secure its customer's written agreement concerning notification obligations of the previous sectionsO" At present Paradigm is still working to keep Celeritas from deposing Accudata, attempting to block Celeritas' ability to find out first-hand why Accudata was considering sending the cease and desist letter.

Paradigm's Trade Secret Claims

In this lawsuit, Paradigm claims that Celeritas misappropriated Paradigm's alleged trade secrets. Though it would be space prohibitive to deal with each and every one of Paradigm's trade secret claims herein, one such claim is that Celeritas misappropriated Paradigm's trade secrets in constructing its audience identification process, a claim that Celeritas strongly denies.

In 2007, Jack Garrett, director of regulatory services for Texas Excavation Safety System (TESS), asked Celeritas to take over the audience identification responsibilities from Paradigm for the TESS ROW program for several reasons, primarily because of what he called "the low quality of Paradigm's program." Some of the specific problems he cited were over-mailing, a low percentage of street-level geocodes, artificially expanded buffers, and a pattern of substantial numbers of missed addresses. Mr. Garrett indicated that in some areas Paradigm had missed nearly 40% of the addresses that should have been identified and, in one case, missed approximately forty miles of pipeline. As to street-level geocodes, Mr. Garrett indicated that in their best year Paradigm only had around 60% street-level geocodes for the TESS ROW program while in many years they were around 40% street-level geocodes.

Mr. Garrett continued, "To put this in perspective, in the first year that Celeritas handled audience identification for the TESS ROW Program we had almost 90% street-level geocodes and above 90% in some metropolitan areas. That's a huge improvement and reflects the high-quality program that TESS seeks to bring to the pipeline community."

How could Celeritas produce an audience identification process that produced 90% street-level geocodes by misappropriating one that, in its best year at TESS, produced about 60% street-level geocodes? The answer is that Celeritas designed and produced its own audience identification process and developed the proprietary software to support that process.

About Celeritas

Celeritas provides software solutions and other services to the Energy and Damage Prevention marketplaces. Its suite of geographic information system (GIS) solutions help organizations fulfill a number of regulatory and compliance responsibilities including One Call and RP 1162 related activities. Celeritas also provides emergency official and excavator training throughout the Midwest and manages these programs on behalf of hundreds of energy companies and state associations using its suite of software solutions. For more information please visit www.pipelineawareness.com.