When patrons of the Garden Street garage in Hoboken, N.J., went to retrieve their vehicles in August, they were surprised that the robotic garage that had so efficiently parked their cars until then had seemingly turned against them, trapping their cars for several days.
The fully automated garage didn't suffer from rusty rotors or gears; it crashed because of an expired software license and a dispute between the software provider and Hoboken.
Stories in the local newspaper, the Hudson Reporter
, revealed an ongoing dispute between Hoboken, which owns the technological innovative garage, and Robotic Parking Inc., the company that created the software and operated the garage. According to the newspaper, the ongoing tumultuous relationship culminated when, days before the parking garage contract was set to expire, Hoboken ordered police to escort Robotic Parking employees from the garage. Hoboken officials didn't realize, however, was that the employees were leaving with software manuals and the intellectual know-how needed to operate the garage.
On July 19, Robotic issued a letter to the garage's patrons charging that the Hoboken Parking Utility still owed Robotic money, and that Parking Utility officials "repeatedly mounted unwarranted vulgar and threatening harassments" toward their staff. The letter said that Robotic would no longer be able "to further subsidize the city of Hoboken Parking Utility."
On Tuesday, July 25, Parking Utility head John Corea, flanked by several Hoboken police officers, escorted a Robotic Parking employee out of the garage in an attempt to take over operations.
The Garden Street garage, a 100-by-100-foot fully automated parking structure, can house as many as 314 vehicles by lifting and pulling them into spots. Drivers pull into the entrance bay of the garage, leave their vehicle on a steel pallet, swipe a card, and the car is whisked away into the garage's interior. When vehicle owners return and swipe their card, their car is returned within minutes.
Because the garage has no ramps or driving lanes, it can hold three times as many vehicles as a conventional parking garage of the same size. For Hoboken, a city with nearly 30,000 people per square mile and few parking spaces that aren't on the street, the Garden Street garage should have been a blessing.
Yet problems began from the outset, when the garage opened in October 2002 -- years late and millions of dollars over budget. Hoboken and Robotic Parking blamed each other for problems during construction and development, which led to a series of attacks between officials from both entities in a series of stories that appeared in the Hudson Reporter
According to the newspaper's coverage, soon after the garage began operations, Hoboken officials complained to the company about continual problems. To add to the feud, two cars were dropped and destroyed. Robotic Parking responded by telling the paper that the city exaggerated problems, and that the company was proud of its performance record.
When the software license term ended in 2005, the city began leasing the software on a month-to-month basis. The last straw for Hoboken came when Robotic Parking requested a 20 percent increase in software rent -- from $23,250 a month to $27,900 per month.
As a result, city officials pulled the plug on Robotic Parking. But without ownership rights to the software, or knowledge of how to operate the robotic parking structure without a manual, the garage shut down. And when the robot stopped working, there was no practical way of manually retrieving the vehicles.
Hoboken and Robotic Parking dragged the situation into court. Robotic Parking accused the city of using the software without a license and endangering its business by bringing in a competitor -- Israel-based Unitronics -- to operate the garage.
"We have the proprietary software in place at the garage, and [Hoboken] brought in a competitor that they said would create new software for the garage -- except the company is using our software; they kept our software without paying for it," said Dennis Clark, Robotic Parking's chief operating officer.
Hoboken's IT officer, who took over operations at the garage, said codes used to operate several dozen components were inexplicably changed overnight, according to coverage in the Hudson Reporter
. Hoboken officials blamed Robotic Parking for sabotaging the software code that caused the garage to malfunction, in effect hijacking the system.
Hoboken officials said they are hesitant to comment on the situation, since they are attempting to create a suitable compromise with the company.
Short End of the Stick
In the world of intellectual property rights, disputes between software providers and customers occur frequently, and often turn into litigation, said Bill Coats, an intellectual property lawyer and partner at White and Case.
Because of this, software companies often protect their products by installing things such as "time bombs," or codes that automatically shut down the program to protect it.
"There are various things vendors put in software that gives them more leverage," Coats said. "Those can be scary when you do not realize they are in there, and find out to your dismay that the program just stopped working."
Once a software license expires, a customer has no rights, and this can lead to problematic situations, especially when software is an integral part of a functioning system.
Yet software companies have found that they can end up getting the short end of the stick when clients manipulate or steal their programs. Earlier this year, Blueport, a company that provided a computer management program to the U.S. Air Force, sued the U.S. government for copyright infringement and won. According to the judgment, the Blueport computer program contained an automatic expiration function that was circumvented by Air Force personnel, who hacked into the program and changed the expiration date. Blueport learned of the incident and was granted compensation from the court.
Because of rapid changes in technology, many agencies do not want to buy rights to software that may become obsolete in five years. Like Hoboken, many agencies lease software, but to protect themselves they should have a contractual safeguard so incidents -- such as customers' cars being held hostage in a garage -- don't occur, Coats said. One way for agencies to circumvent a professional software relationship turned sour is to include "carry-over" rights into a contract, which allow the software user leeway to find another vendor and give the user bargaining leverage.
Contracts between governments and technology providers should not pose any danger to governments if contracts are properly structured -- the key being to clearly delineate ownership and transfer intellectual property before the contract is signed, said Christopher Neff, vice president of marketing for NIC, a company that builds and manages government technology services.
"In the world of e-government, the primary concern governments have is maintaining continuity in the event of a change in service providers," Neff said, adding that government organizations need to diligently research the companies they consider doing business with by checking references and asking many questions; otherwise they run the risk of legal disputes.
Hoboken officials felt trapped in a bad -- yet costly -- contract signed years ago by a previous parking agency, said Joe Sherman, corporation counsel for Hoboken.
"When the Parking Authority was dissolved," Sherman said, "Hoboken was stuck with a contract that didn't give them rights to the software; rather they were held hostage by the owner of the software."
Recently Hoboken and Robotic Parking issued a joint press release announcing that a settlement had been reached in court.
The three-year agreement states that Hoboken will pay Robotic Parking a monthly software fee of $5,500, while Unitronics will operate and maintain the garage for $23,250 a month. All fees combined, the city will pay $28,750 for the garage's monthly operations -- $850 more than Robotic Parking's proposed fee increase that sparked the debacle.
Robotic Parking, however, can still seek legal relief for the alleged infringement of the copyrighted software if the company chooses, Clark said, which adds up to about $45,000 in back bills.
"I couldn't foresee this happening anywhere else other than Hoboken," Clark said.
On the other side, Hoboken officials said they felt at a distinct disadvantage.
"The people managing our garage are holding us by the short hairs," Sherman said.
Hoboken contends that a suitable agreement is still needed and is working on revising the original agreement, while the Hudson Reporter
said the city is looking to sell the garage. After Hoboken residents filled up blogs about the garage, the relative truce seems to have residents ready to park their cars in relative peace.
"I'm so glad this is resolved simply because I am so sick of hearing about this," said one blogger, while another blogger complained of a 25-minute wait to get their car out of the garage.