Tandberg and PictureTel trade press releases, lawsuits

April 1, 1998

Tandberg and PictureTel trade press releases, lawsuitsDispute erupted after Tandberg bought NuVisionIn what has turned into an increasingly acrimonious battle between two competitive videoconferencing companies, Norwegian firm Tandberg

Tandberg and PictureTel trade press releases, lawsuits

Dispute erupted after Tandberg bought NuVision

In what has turned into an increasingly acrimonious battle between two competitive videoconferencing companies, Norwegian firm Tandberg and its U.S. subsidiary NV Holdings have become embroiled in a dispute with PictureTel. A complex legal and public relations battle has ensued that has many industry watchers struggling to make sense of the dueling lawsuits and press releases.

The dispute centers around Tandberg's acquisition of videoconferencing reseller NuVision Technologies and its parent company, NV Holdings, in January (PNN 3/98). NuVision was an exclusive PictureTel reseller, and the purchase was the latest step in Tandberg's aggressive campaign to secure a more prominent profile in the North American market. Tandberg executives last month indicated that NuVision would probably no longer sell PictureTel systems.

According to NV Holdings, PictureTel, shortly after the acquisition was completed, began disseminating false information about NV Holdings' financial health, stability, and capacity to render quality service to its customers. In response, NV Holdings on Feb. 13 filed suit in a state court in Dallas against PictureTel, charging the company with slander, tortuous interference, and issuing intentionally false statements. NV Holdings sought a permanent injunction against PictureTel and certain employees, as well as $20 million in punitive damages.

Less than a week later, PictureTel fired back with a lawsuit of its own. In litigation filed in a Massachusetts state court, PictureTel charged NuVision Technologies with violating written contractual provisions to keep PictureTel's proprietary information confidential and to refrain from using PictureTel's trademark and trade name.

To back up its suit, PictureTel pointed to an advertisement in the Feb. 9 Northeast edition of The Wall Street Journal that it believes was false and misleading. Since the matter is under litigation, PictureTel would not discuss which particular statements were misleading. It did say, however, that pricing information was taken from PictureTel's price book, which was not intended to be made public. Additionally, once NuVision Technologies ceased being a PictureTel reseller, it no longer had the right to use PictureTel's trade name or trade logo in any type of business situation, according to PictureTel spokesperson Kevin Flanagan. In a separate suit, PictureTel also claimed that NuVision owes PictureTel more than $4 million for PictureTel videoconferencing products sold by NuVision to end-user customers.

While NV Holdings did place the ad in The Wall Street Journal, the company denies that NuVision Technologies ever had a contractual relationship with PictureTel not to disclose this information. NV Holdings has amended its initial lawsuit against PictureTel to include additional claims of damages caused by what it believes are PictureTel's misstatements of fact in press releases it has issued during the dispute.

To further complicate matters, NV Holdings legal counsel Albert Greco claims that PictureTel has sued the wrong company. Greco claims that PictureTel is suing a company called NV Technologies, allegedly another former PictureTel distributor that has done business in the past using the NuVision name. NV Holdings and NuVision Technologies do not have any connections or relationship with NV Technologies, according to Greco. As such, NV Holdings and NuVision Technologies are not party to the lawsuit, he said.

PictureTel disputes Greco's claims, however. PictureTel spokesman Flanagan says his company has no knowledge of another former PictureTel distributor called NV Technologies.

In a separate lawsuit, PictureTel also charges that NuVision's senior vice president of sales Joseph Bane has breached his fiduciary relationship involving the connection between PictureTel and NuVision. No further details were available on this action.

On Feb. 24, PictureTel announced that a judge in the Essex County Superior Court had granted a preliminary injunction the company had requested against NuVision Technologies. As a result, NuVision Technologies may not publish or disseminate the advertisement that appeared in The Wall Street Journal or any false and misleading advertisement about PictureTel, disclose PictureTel's confidential pricing information, or use the name PictureTel and any other trade name or trademark of PictureTel, or make false or misleading statements about PictureTel, according to the company.

Despite NV Holdings' claims that PictureTel is suing the wrong company, PictureTel is standing by its lawsuit, Flanagan said.

"We know whom we did business with, and we brought suit against that same company, which is the same company that we claim owes us $4 million from their former role as a PictureTel reseller," he said. "The company did in fact sell those systems to end users for which they have not yet paid PictureTel, and they have since sold their business to Tandberg."