Kennametal accused of stealing software trade secrets in new lawsuit

Kennametal

06/02/2025 16:29

By Blake Brittain
       Feb 6 (Reuters) -    Industrial toolmaker Kennametal
 KMT.N  allegedly stole former software partner MachiningCloud's
trade secrets to build a competing sales platform, according to
a lawsuit in California state court made public on Wednesday.
    MachiningCloud said in its complaint that Kennametal owes at
least $330 million in damages for misusing its secrets, breaking
the companies' contract and failing to pay royalties for more
than $1.7 billion in Kennametal's product sales.
    Spokespeople for Kennametal did not immediately respond to a
request for comment. 
    "We believe this is a simple case of a large company trying
to take advantage of a smaller company," MachiningCloud said in
a statement.
    The lawsuit said that Camarillo, California-based
MachiningCloud began working with Kennametal in 2011. According
to the complaint, MachiningCloud agreed to develop a sales
platform, Novo, that Pittsburgh, Pennsylvania-based Kennametal
would license in exchange for a share of royalties from sales
made through the software.
    MachiningCloud said it learned recently that Kennametal had
underreported the royalties it owed since Novo began operating
in 2014. The lawsuit also said that Kennametal began operating
its own "knock-off" platform in 2021 that siphoned sales from
Novo.
    Kennametal earned more than $2 billion in revenue from sales
of its tools and components to customers in aerospace, defense,
and other fields last year, according to a company report. 
    MachiningCloud asked the Ventura County, California court
for monetary damages and an order to shut down Kennametal's
platform.

 (Reporting by Blake Brittain in Washington)