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Licensing helps Figtree keep its software safe from imitators

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Steve and Abby Rosenstein don’t hold any patents for the software they’ve developed.
Steve and Abby Rosenstein don’t hold any patents for the software they’ve developed. - ()

Abby and Steve Rosenstein, founders of Figtree Software, have roughly $8 million invested in the development of just one of their software products.

Now, multiply that $8 million across the variety of software systems the company has developed over its 30 years in business, and add in the thousands of man hours it takes to write each individual program, and the value of Figtree's intellectual property is clear, Rosenstein said.

But the company doesn't hold any patents — and doesn't plan on pursuing any, either.

“What we develop, how we develop it, is certainly important to us because that's the product we sell,” Rosenstein said. “But also, it's pretty specific to certain kinds of tasks, and it's not that easily unwound by someone else.”

“The source code is not like reading a book,” she said.

That doesn't mean Rosenstein and her husband are careless about protection. But instead of patents, the company licenses its software to its various clients — a list that includes Scholastic, the world's largest publisher and distributor of children's books, and McKee Foods Corp., which makes Little Debbie snack cakes.

Rosenstein and her husband started the business in their bedroom in 1983, after moving to the Garden State from St. Croix, in the Virgin Islands.

Rosenstein and her husband wanted to help companies make use of PCs. She was a college art major who had a knack for math and a budding appetite for computer programming. Her husband is a CPA with a good amount of business law training.

Figtree, which they thought would focus on developing custom software solutions for companies, would be a perfect blend of their strengths, she said.

Today, the Morris Plains company has 12 employees, many of whom have been with the company for more than a decade, and still does custom software development. But its most popular product is shareholder accounting software, which can help a company with shareholders track the transfer of shares from one person to another and the payment of dividends.

Whether it's for custom software or for their shareholder accounting software, Figtree requires all its clients to sign licensing agreements to gain access to its products.

Those licensing agreements give Figtree's customers the ability to use the software in their businesses, but they do not own the software systems themselves, Rosenstein said.

“You can use it indefinitely, but you don't have the rights to it or to the underlying tools that make it up,” she said.

Rosenstein said patents make sense for, say, pharmaceutical companies with billion-dollar products. And if that were the case at Figtree, she would pursue patents, too.

But she and her husband spend millions on product development, not billions. And that difference, coupled with the types of products they create, makes licensing a better option, she said.

“The competition we have has software that's got different programming languages. They would like to have our customers, but I don't know that they would want to have our software,” she said. “They wouldn't know what to do with it without our help.”

E-mail to: maryj@njbiz.com
On Twitter: @mjohns422

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