Fiserv and Charles River Systems, two financial services technology vendors with a local presence, are duking it out over a pilfered client list that has supposedly allowed one to nab business from the other.

Fiserv laid off employee Daniel Papagni in July 2008. By May 2009, the company alleges in a lawsuit, Papagni had handed over a list of key individuals at dozens of Fiserv clients to Charles River, his new employer. Fiserv said generating the list, and creating relationships with the potential clients on it, would have taken its competitor enormous amounts of time and effort.

Hardly, Charles River replied in a rebuttal filed this month. Fiserv’s customers are wealth managers who need to attract customers of their own, the rebuttal says – they advertise publicly, and aren’t exactly tough to find. These individuals can be found via a huge variety of sources, including Web searches and the clients’ own press releases.

Charles River is based in Burlington, while Fiserv, a subsidiary of CheckFree Corp., has main operations in Georgia but maintains Boston offices. Both companies compete to sell technology products that aid financial services companies, including banks, broker-dealers and investment advisors. The equipment is complex and expensive, and requires a significant investment of time to close a sale, Fiserv argued in a complaint filed in Boston Federal Court in February.

Fiserv’s complaint includes accusations of corporate intrigue: Papagni had worked for Charles River for some time before handing over the list, and did so to help get a promotion to regional sales manager. He supposedly turned the list over to his boss, after which Charles River employees went to work, contacting Fiserv’s potential clients and scooping up business.

Really That Valuable?

Fiserv said it compiled the list through years of relationship-building, and took great measures to protect the information through password protection and encryption.

That’s what the whole case boils down to, said Jonathan Friedmann, partner with Boston-based Rudolph Friedmann: Was the information truly proprietary?

If the list truly was created over time through Fiserv’s efforts, and was strenuously protected, the company’s case looks stronger, he said. It also might be meaningful that it took the Papagni months to supposedly turn the list over after beginning employment at Charles River. That might imply he knew that he wasn’t supposed to share the information in the first place, Friedmann said.

The situation came to light recently thanks to the actions of a disgruntled ex-employee of Charles River, according to court documents. The employee, under a false name, e-mailed Fiserv in January and told them sales staff had been using Papagni’s list to solicit customers and had gained a lucrative contract because of it.

While Charles River doesn’t deny that Papagni printed out a list of 200 names, it claims that nothing indicated it belonged to Fiserv. Charles River said most of the information was already well known, and a few of the Fiserv clients on the list had also bought Charles River systems in the past – including the company Charles River had supposedly stolen away.

Fiserv claims Charles River had stolen business, but Charles River admitted that it gained no new clients from the list. And since it had been of no use to Charles River, it couldn’t have been that precious to Fiserv, either.

“At the end of the day, if the list was so valuable, why didn’t [Fiserv parent] CheckFree realize that Papagni had made a copy of it and taken it with him?” Charles river said in its court filing. “Why did it take an email from an outside source for CheckFree to realize that it was gone?”

Attorneys for Fiserv did not return calls seeking comment. Charles River counsel offered no comment beyond public court filings.

This type of suit is very common, Friedmann said, as competing companies try to draw the lines between what is proprietary and what it not. This year, Liberty Mutual filed a similar case in which it sued former employees for swiping company documents when they quit to go work for rival Aspen Insurance. That case, filed in New York State Supreme Court, is ongoing.