FIRST AMENDED COMPLAINT Page 1 of 32 Laurence Singer (LS ...

Case 1:10-cv-09648-BSJ -MHD Document 28 Filed 04/01/11 Page 4 of 32
16. In April 2006 2FA and Passlogix entered into a License Agreement under which
2FA granted Passlogix a license to rebrand, market, and sell its strong
authentication/credential management software under very restrictive terms.
17. At the time of signing the License Agreement Passlogix did not possess strong
authentication/credential management expertise.
18. Strong authentication is a term of art in the software security industry, achieved
when a user authenticates to a computer or computer network with more than one form of
authentication, such as a password and a physical device. The process is very similar to
the manner in which an ATM banking authentication occurs with a “smart card” and PIN.
19. At the time 2FA and Passlogix executed their License Agreement, 2FA was a new
company deeply focused on the development of strong authentication and credential
management software, and Passlogix was its sole customer.
20. At the time of signing the License Agreement Passlogix had nearly 500
customers, and desired to add strong authentication/credential management expertise and
technology to its product line to effectively grow and compete in the market.
21. Several months after 2FA and Passlogix signed the License Agreement, Passlogix
entered into a license agreement with Oracle. For the majority of the term of the 2FA/
Passlogix License Agreement, Oracle was a business partner of Passlogix, selling
rebranded Passlogix software as Oracle eSSO.
22. In 2007 Oracle and Passlogix were engaged in negotiations for an Oracle
acquisition of Passlogix. For undisclosed reasons the transaction was not completed.
23. In August 2008 2FA and Passlogix ended their relationship through the creation
of an amendment to the License Agreement. Amendment B represented the winding
FIRST AMENDED COMPLAINT Page 4 of 32