DSS setback in long-running lawsuit with Coupons.com

Document Security Solutions (DSS) has been defeated in a lawsuit that claimed digital media group Coupons.com had misappropriated trade secrets.

The lawsuit alleged that the online coupon specialist had made use of DSS' proprietary digital copy protection technology, using the technology in its coupons without authorisation and in breach of nondisclosure agreements.

DSS had claimed that Coupons.com had deployed the technology on billions of coupons since 2006 and was reportedly asking for damages amounting to $240m-$300m. The judge in the case however awarded Coupons.com a summary judgment dismissing the claims.

In a short announcement, DSS said it was "assessing its position in light of the ruling," without providing any further guidance on its plans.

The verdict hit DSS' share price hard, with the stock trading at around $0.53, well off its 52-week high of $2.46, although the decline was exacerbated by another legal defeat in another business division unrelated to its brand protection activities.

While DSS may have missed out on the potential windfall if the Coupons.com suit had gone the other way, the company remains buoyant about the prospects for its AuthentiSuite security platform.

Second-quarter revenues were around $5m, with the bulk ($4.5m) coming from printed document security activities and around $500,000 from its digital security group, which includes DSS' online brand protection platform. At the end of the quarter DSS had around $1.5m in cash reserves.

In August, DSS reported that it had signed its first contract for a fully-integrated application of AuthentiSuite - spanning print (AuthentiGuard) and online (AuthentiSite) brand protection, along with a related mobile app.

"We are currently in varying stages with several national brands about implementing our AuthentiGuard technology," said chief executive Jeff Ronaldi.

Investor will be hoping for more positive news on the AuthentiSuite roll-out when the company's third-quarter results are reported next week.