The rhetoric intensified in a legal dispute between AMX and former partners in the multi-dwelling unit (MDU) space, as the accused parties vehemently denied any wrongdoing and fired their own allegations back at AMX.
A week and half ago, AMX sued rival Crestron’s newly exclusive MDU partners, Cimax USA and Vertical Integration Group (VIG), among other parties, for racketeering, conspiracy, fraud and theft of trade secrets. The federal lawsuit claims “interference with AMX business and breaches of fiduciary duties.” AMX filed suit “based on various fraudulent acts and to enjoin the defendants from disclosing AMX trade secrets,” the company said.
The suit is the end result of a relationship gone extremely sour. AMX announced in November 2004 that Cimax would integrate AMX’s Amenities Solution, an automation system that connects residents with various hospitality services via touchpanels, at three Miami Beach properties. However, Crestron last month announced that Cimax and VIG had become its exclusive partners to sell MDU products, at which time Cimax/VIG Co-Owner George Fallica took a veiled shot at AMX, saying, “We had difficulty finding a vendor/supplier that could deliver the technology [developers] demanded. After research, we came to the conclusion that Crestron is the clear choice [for home automation integration] based on their superior technology as well as their support and responsiveness to address the needs and visions of developers.”
Last week, Cimax/VIG said the AMX suit is “void of any factual allegations of wrongdoing and relies on a crutch of speculations.” Calling AMX’s press release about the suit “libelous,” it emphatically denied all claims of wrongdoing and said it will ask the judge to dismiss what it calls a “frivolous” and “meritless” suit. Cimax/VIG characterized AMX’s action as an “obvious smear tactic,” saying AMX “has in the most shameless manner attempted to discredit Cimax. Besides distributing the libelous release, AMX has been contacting Cimax’s clients and business partners directly—clearly a ploy to ruin Cimax/VIG client relationships.”
At the core of the dispute is ownership of potentially powerful intellectual property. Cimax/VIG claims that for the past three years, AMX, hungry to get into the MDU market, “used Cimax, its customers and strategic alliances to create an amenities solution package. To develop this AMX product, Cimax created an affiliate, B&M. After creating a market in excess of 75,000 MDUs for use with the AMX product, AMX arbitrarily and in violation of its agreement terminated B&M and Cimax, causing Cimax to suffer tens of millions of dollars in financial losses. It seems as if AMX is accusing Cimax of doing exactly what AMX has done to B&M/Cimax. Cimax feels this behavior is intolerable and unprofessional.” Months ago, B&M filed a pending suit in federal court against AMX for “breach of an Exclusive Representation Agreement and for deceptive and fraudulent practices,” but “unlike AMX, Cimax did not feel it was appropriate to distribute a press release concerning its litigation against AMX.”
AMX alleges Cimax had a “contractual obligation to use its best efforts to sell AMX products and to protect AMX valuable trade secrets.” It claims “Cimax and its owners formed VIG for the express purpose of selling products to Crestron, and misrepresented its intentions to AMX.”
“This suit is without merit and completely absurd,” said Fallica. “It is clearly a retaliation effort due to our recent partnership with an AMX competitor [Crestron]. This is a classic tale where innovative and talented entrepreneurs shared intellectual processes, systems and software with a corporate giant and the giant tries to steal the business. I would be more than happy to provide a copy of both lawsuits to anyone who wants them to further shed light on the true nature of this situation.”
Crestron, for its part, issued the following statement: “We are not aware of or involved in any legal action between Cimax and AMX. We understand that Cimax issued a statement in response to AMX’s claims. Crestron remains focused on developing new technologies to elevate our industry and to help our dealers grow their businesses. We support all of our industry partners, including our dealer Cimax USA.”