AutomationDirect, AVG clash over restraining order, lawsuit

Oct. 21, 2005
A legal dispute between two operator interface panel manufacturers that’s been simmering in federal court for the past six months finally boiled over in a public disagreement about a restraining order related to their litigation.
A LEGAL DISPUTE between two operator interface panel manufacturers that’s been simmering in federal court for the past six months finally boiled over last month in a public disagreement about a restraining order related to their litigation.    AutomationDirect reported Oct. 20 that it voluntarily negotiated and agreed to an Oct. 11 court order delaying the launch of its new C-more panels, and that it wasn’t actually forced to stop selling the products by the U.S. District Court for Northern Illinois, as stated by AVG at its Oct. 18 press conference.AVG revealed Oct. 18 that it had filed an intellectual property lawsuit against AutomationDirect in September 2005. This litigation reportedly claims that AutomationDirect secretly copied AVG’s EZTouch panel during their recent joint venture partnership, which AVG says violated AutomationDirect’s obligations to it. AVG adds it believes that Koyo Electronics Industries was manufacturing these “knock off” panels as C-more in China.AutomationDirect stated Oct. 20 that it believes AVG’s lawsuit is without merit, and that it intends to prove this in court.  In addition, AutomationDirect adds it was actually the first litigant in its dispute with AVG. AutomationDirect reports it filed the first lawsuit in April 2005 against AVG’s EZ Automation in U.S. District Court in Atlanta for trademark and copyright infringement and for false and deceptive advertising. AutomationDirect says it didn’t publicize its earlier lawsuit, so it could be handled in court, rather than outside.“AutomationDirect has not previously been involved in any major legal proceeding. However, it is our philosophy that legal issues that can’t be resolved otherwise should be decided in the courts based on facts from both sides,” stated AutomationDirect in its Oct. 20 release. “It should be noted that AutomationDirect’s success in business has been based on stringent core values in personal and business conduct. As such, we had refrained from making any details of this lawsuit public, since legal issues should be handled in court and not in other venues.” AVG stated on Oct. 18 that U.S. District Judge James Holderman’s order “stopped” AutomationDirect, its president and CEO, Tim Hohmann and Koyo from soliciting or accepting any orders for C-more products, and “restricted them” from advertising any pricing information. However, the order itself says, “The parties agree and stipulate that…the defendants shall neither solicit nor accept any purchase order for the C-more line of products, or discuss, advertise, or disclose the pricing of said products with existing or potential customers from and after the entry of this order.” The order adds that it doesn’t affect C-more information already in circulation, that AutomationDirect can talk about C-more with its distributors, and that the order will terminate when a subsequent order is issued.

AVG added Oct. 18 that it’s seeking to stop all marketing of the C-more panels. The firm stated that, “AVG intends to continue its attempt to restrain what we believe to be the illegal, immoral and unfair activities of the defendants, and will continue to take all steps to stop AutomatioDirect, Tim Hohmann and Koyo from profiting from what we have alleged to be secret development of the Asian knock-off panels for their own benefit, while Automation Direct was contractually and legally bound to act as a partner of AVG.” 

AutomationDirect responded Oct. 20 that, “During this legal proceeding, AutomationDirect voluntarily agreed to the entry of a brief, temporary restraining order that delays for a few days the launch of our C-more product, so that the court would have a chance to hear the merits of the case.The terms of that order were voluntarily negotiated by the parties themselves, and adopted verbatim by the court.  Unfortunately, AVG has decided to use AutomationDirect’s voluntary cooperation with the legal process as a marketing tool in the form of a disparaging and misleading press release to the media. In an effort to set the record straight, AutomationDirect has issued this press release. We will proceed with the issues in the court system, where we feel we will be fully vindicated when all of the facts are revealed in the appropriate forum and under the appropriate circumstances.”