Dive into the legal battle between Carnival Cruise and a bankrupt software developer over the OceanMedallion™ guest engagement system. Discover how Carnival fought to protect its proprietary innovation and the outcome of this high-stakes showdown.
September 8, 2023
Carnival, the cruise company known for unforgettable voyages, has a secret weapon called the OceanMedallion™ guest engagement system. It’s like the magic wand that makes your cruise experience extra special.
Carnival had hired a software developer to create some digital wizardry for this system. They shared their secrets, their ideas, and their know-how, making this software unique and exclusive to Carnival.
But the software developer hit some rough waters and ended up in a Delaware bankruptcy. And guess what they’re trying to do? They want to sell their DXP software, the one with Carnival’s secret sauce inside, to the highest bidder!
Carnival is not having it. So, what’s happening now is a legal showdown. Carnival is on a mission to protect its innovation, its secret ingredients, and its way of making your cruise experience truly magical.
It’s a battle of who gets to keep and control this unique software.
So, here’s the backstory: The software seller found themselves in financial hot water and filed for bankruptcy.
They made a deal with what we’ll call a “stalking horse bidder” for an auction sale. Think of them as the first person in a bidding race, kind of like the leader at the starting line in a race.
Now, what’s interesting is that this stalking horse bidder was connected to the lender who had given the seller money both before and after they hit these financial bumps.
The Delaware bankruptcy judge approved this plan, which included selling the seller’s DXP software assets free of any intellectual property infringement claims.
Carnival challenged the proposed sale. They asked the judge to rule that the seller’s DXP software contained Carnival’s proprietary information. Carnival also asked the court to order the seller to stop using, disclosing, or trying to sell its DXP software.
The court ruled that in Carnival’s favor.
The seller’s lender and stalking horse bidder, before the Carnival litigation, probably had no idea about the infringement mess that was brewing.
Why’s that? Well, the seller had an impressive track record between 2009 and 2014. They were a seasoned pro in the cruise and hospitality world, working on more than 90 projects, including Disney Cruise Line, Walt Disney Parks & Resorts, Royal Caribbean Cruise Lines, and Bags, Inc.
And here’s the kicker: Since at least 2011, the seller had been diving deep into software architecture for cruise ships. They were like the behind-the-scenes maestro making sure everything ran smoothly on those luxury liners, thanks to their work with Disney and other big players.
See IN RE DeCURTIS HOLDINGS LLC, Case No. 23-10548 (JKS) (Jointly Administered), Adv. Pro. No. 23-50413 (JKS), United States Bankruptcy Court, D. Delaware (August 9, 2023).
By John McCauley: I write about recent legal problems of buyers and sellers of small businesses.
Telephone: 714 273-6291
The blogs on this website are provided as a resource for general information for the public. The information on these web pages is not intended to serve as legal advice or as a guarantee, warranty or prediction regarding the outcome of any particular legal matter. The information on these web pages is subject to change at any time and may be incomplete and/or may contain errors. You should not rely on these pages without first consulting a qualified attorney.