Entergy Services Inc., an Entergy Corp. subsidiary, violated its contract with software company Allen Systems Group Inc. by allowing access to its software by unauthorized companies, Allen Systems said last week.
Entergy Services sued Allen Systems in Pulaski County Circuit Court, arguing that Allen Systems had demanded that Entergy Services pay an access fee for allowing Entergy's contractors to work on the system on which the software was installed.
New Orleans-based Entergy Services said 480,000 Entergy Corp. customers in a four-state area would lose access to their online bills in September if a software "time bomb" was activated.
Pulaski County Circuit Judge Tim Fox agreed to a restraining order, telling Allen Systems to provide the software key to stop the "time bomb." Allen Systems abided by the order.
An October email from an Entergy Services employee to an Allen Systems employee acknowledges that Entergy Services "has outsourced portions of its [information technology] support to third-party service providers."
"We would like for such providers to be able to access and use such applications that are subject to the license for the sole purpose of performing services for us," the Entergy Services employee said. "Please confirm back to me that this is acceptable to Allen Systems Group."
Entergy Services has licensed software from Allen Systems since at least 2001, Allen Systems said. The license agreement stipulates that any attempt by Entergy Services to assign rights, duties or obligations of the agreement without consent of Allen Systems voids the license.
Entergy has used the software outside the scope of the license agreement, said a person familiar with the issues who asked not to be identified.
"Entergy is the 800-pound gorilla in Arkansas," the person said. "Sometimes they push their weight around a little too much and think that they can get by with more than they would if there were a competitor out there."
Allen Systems has not consented for Entergy to provide access or use of Allen Systems' software by third parties, Michael Scarpato, senior vice president for Allen Systems, said in a filing in the case.
Entergy Services' employees Dennis Dallimore and Christopher Dickinson said in affidavits filed in the case that Allen Systems had a "time bomb" included in the software and that it must be deactivated with a software key from Allen Systems, Scarpato said.
Allen Systems does not employ a "time bomb," which normally refers to malicious software that can release or spread a software virus, Scarpato said.
"That is very different from the type of key utilized by [Allen Systems], which simply controls access to the software on the basis of predefined time periods," Scarpato said.
An Entergy spokesman has said that she cannot comment about the lawsuit.
Fox ordered the two companies to participate in nonbinding mediation on the issue.
Business on 08/30/2016