Technology Holdings Sues SFS IT Services Over Software
The lawsuit alleges the distributor replaced authorized games with copied software across 100 locations.
Updated on Oct. 29, 2026 in Cybersecurity
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Technology Holdings Corporation has filed a federal lawsuit in Austin accusing former Texas distributor SFS IT Services of stealing proprietary software code. The plaintiffs claim the defendants replaced authorized software with a copycat product at more than 100 locations shortly after their eight-year distribution deal ended.
Why it matters
The dispute centers on allegations that trade secrets allowed for a rapid software switch, highlighting the legal stakes for former business partners in the regional gaming market. The case is now pending in the Western District of Texas.
The lawsuit alleges that 23 games within the Phantom software use reel strips identical to 15 original titles from the StealthX library. This software is reportedly currently operating across more than 100 locations throughout the state.
The players
Technology Holdings Corporation
A Minneapolis-based firm that develops gaming software and is the primary plaintiff in the lawsuit.
SFS IT Services Inc.
A Texas-based company that served as the exclusive distributor for the plaintiffs for eight years.
Cody Rogers
A named defendant and principal associated with SFS IT Services Inc.
Morris Joseph
A named defendant and principal associated with SFS IT Services Inc.
The details
Plaintiffs allege that SFS IT Services, along with its affiliates and principals Cody Rogers and Morris Joseph, began planning a transition away from the StealthX product in November 2025. Following the expiration of their distribution agreement on April 28, 2026, the company purportedly deployed the Phantom software to terminals by May 24, 2026. A senior engineer for the plaintiffs reportedly verified the alleged theft by matching specific symbol codes and reel stop positions between the two programs.
Timeline
The companies first signed a distribution license agreement in April 2018.
Defendants allegedly began planning the software transition in November 2025.
The parties' license agreement officially expired on April 28, 2026.
The unauthorized software deployment allegedly occurred on May 24, 2026.
The Texas Context
This litigation follows the legal enforcement patterns established under the Defend Trade Secrets Act of 2016 regarding the unauthorized use of proprietary software code. It marks a significant escalation in the commercial relationship between these former Texas business partners.
While the litigation is concentrated in the federal court in Austin, owners of locations currently utilizing the Phantom software may face potential service disruptions as the case proceeds. Business operators should monitor court filings for any potential injunctions that could affect their equipment.
The takeaway
The court will now weigh evidence regarding the origin of the Phantom software code and the timeline of the defendants' actions. Readers should monitor the Western District of Texas docket for updates on upcoming hearing dates regarding the alleged misappropriation.
Further reading
For more on how local businesses protect proprietary data, visit our Cybersecurity section.
Source note: This article includes information reported by Deadspin.
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