A trade secrets suit that Banctec Inc. filed against a small rival seems to have backfired.

In Dallas last month a jury awarded the rival, which had countersued, $5.5 million in damages.

In its suit, Dallas-based Banctec charged that Advanced Financial Solutions Inc. had improperly obtained proprietary information from the financial systems firm about one of its check-processing software products.

Tod Mongan, senior vice president and general counsel at Banctec, said his company had sued Oklahoma City-based Advanced Financial and five of its employees and officers in 1993. Four of the individual defendants were former Banctec employees, he said.

"We felt that these individuals may have misappropriated some of Banctec's trade secrets" with regard to a "proof-of-deposit" software package Advanced Financial marketed, Mr. Mongan said. The speed with which Advanced Financial developed its check-processing software also "led us to believe what we did," he said.

Mr. Mongan added that a final judgment had not yet been entered by the judge, and who Banctec hoped would set aside or reduce the jury award.

The award, if it stands, could have a big impact on Banctec's bottom line. The company earned $4.4 million in the fiscal quarter that ended Dec. 25, on $77.8 million in revenues.

Banctec officials were obviously dismayed by the jury's verdict. "We believe our case to be well-founded and are disappointed with the jury's decision," said chief executive officer Grahame N. Clark Jr. in a statement. "Once the final judgment is entered, Banctec intends to carefully consider all available options, including appeal."

Preston Farris, president of Advanced Financial, commented: "We are pleased that the jury vindicated our small company and saw fit to award damages. It has been our position all along that we created a great product that was being held back by this lawsuit."

Mr. Mongan said Banctec was considering filing additional motions with the judge, centering on whether the jury award was proper. He added that he was not sure when the judge would file his final judgment.

In a related development, another maker of check-processing systems, Recognition International Inc., announced last month that it was reintroducing a check-image-processing software package, called Imagevision, that was developed for the company by Advanced Financial but withheld from market after Banctec sued.

"While we have believed in the superior features of the (Advanced Financial) software throughout," said Bob Vanourek, chief executive of Recognition International, "removal of the cloud created by the Banctec lawsuit justifies our reintroduction of the product. We believe it to be the premier proof-of-deposit software available on the market today."

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