Maximum Availability Sues Vision Solutions Over Advertising Claims
June 7, 2010 Timothy Prickett Morgan
High availability software maker Maximum Availability has filed a lawsuit against its rival in the high availability/disaster recovery space for iSeries, System i, and Power Systems servers, Vision Solutions, alleging that advertising materials used by Vision Solutions to peddle its various products contain false information that has done damage to Maximum Availability’s business.
Maximum Availability, which is based in Aukland, New Zealand, but which has operations in the United States, filed the lawsuit against Vision Solutions on December 7, 2009, in the United States District Court for the Northern District of California in San Francisco. The lawsuit names Vision Solutions, which is based in Irvine, California, as well as Bill Hammond, director of product marketing at Vision Solutions, as defendants.
Maximum Availability is an upstart HA supplier that in 2000 pit itself against Vision Solutions, Lakeview Technology, DataMirror, and iTera, the latter itself an upstart in the iSeries HA market that jumped into the fray about the same time as Maximum Availability. Vision Solutions, Lakeview Technology, and iTera have all been merged into one company bearing the Vision Solutions name following acquisitions of the three companies by private equity firm Thoma Bravo. Having established the dominant position in the i market, Thoma Bravo three weeks ago said it would expand from the OS/400, i, and AIX clustering market into the Windows HA space through its $242 million pending acquisition of Double-Take Software. Thoma Bravo has done more than 30 software acquisitions in the past five years, and those companies generate approximately $2 billion in revenues and $500 million in profits, according to its Web site; the Double-Take deal is not done, so its financials are not included in that figure.
Both Vision Solutions and Maximum Availability, which are staunch competitors, drive a healthy share of Power Systems server sales running the i5/OS and i operating systems. And new competitors are entering the field in the wake of the merger of Vision Solutions, including Bug Busters Software Engineering, Shield Advanced Solutions, and Trader’s.
Maximum Availability’s lawsuit alleges that the marketing and advertising materials used by Vision Solutions over the past several years have included false and misleading statements about Maximum Availability’s products and its business. The claims that finally made Maximum Availability pick up the phone to call a lawyer were in a set of documents dated June 30, 2009, from Vision Solutions, which said that Vision Solutions had replaced Maximum Availability’s products at over 80 customer installations, that its products can take more than 30 days to install, and that it does not have an organization that can span the globe and offer 24/7 support.
In its lawsuit, Maximum Availability says that these claims violate the false advertising provisions of the Lanham Act and also California’s False Advertising Act and Unfair Business Practices Act. Maximum Availability asked the court to grant a temporary restraining order, a preliminary injunction, and a permanent injunction preventing Vision Solutions and its affiliates from distributing the materials with the incorrect characterizations of Maximum Availability’s products and business, and also asked for the court to compel Vision Solutions to distribute corrective materials to all parties that received the initial advertising and marketing communications. Maximum Availability also asked for the U.S. District Court to award it compensatory damages and lost profits, and asked for treble damages and lawyers fees because it alleges that Vision Solutions’ actions were willful. The company also asked for a trial by jury.
Vision Solutions answered the complaint on March 10, 2010, basically admitting that the two companies are competitors, that Hammond works at Vision Solutions, and that it did indeed distribute documents, but denying all other claims made by Maximum Availability. Vision Solutions’ lawyers argue that the claims by Maximum Availability are barred because of the three-year statute of limitation in the Lanham Act and by not objecting to the use of the materials in a timely fashion.
On April 1, the two parties met in court, facing Judge George Wu of the U.S. District Court, and on April 26, the parties held a status conference. On May 20, the judge ordered a preliminary injunction against Vision Solutions to stop the distribution of the advertising and marketing materials that were created on June 20 of last year. Judge Wu also ordered that everyone who received this material to be sent a message, crafted by and approved by both parties, basically telling them they can’t make any representations about how many customers have switched from Maximum Availability’s products to those of Vision Solutions, about Maximum Availability not having global, 24/7 support, or that coding and customization are required to use the *noMAX HA products.
“While we are very disappointed that we have had to take this action we are pleased with the U.S. District Court’s preliminary injunction,” said Allan Campbell, chief executive officer of Maximum Availability, in a statement put out by the company. “We take pride in providing a premium high availability solution for the IBM i platform and in ensuring that we provide high quality support around the clock. The false claims by Vision that we do not provide 24×7 support and that they have replaced our software at over 80 customers were very harmful, unlawful, and left us with no option but to take measures to set the record straight.”
The injunction does not, of course, settle the matter. But both companies may settle the lawsuit before it goes to trial, and if not, a trial will settle it.
Vision Solutions gave exactly the kind of response to the public airing of the lawsuit that you would expect from any technology company.
“The order is preliminary and we believe the lawsuit is without merit,” explained Debbie Madoni-Lewis, senior public relations manager at Vision Solutions, in an email sent to The Four Hundred. “We’ll provide no further comment on pending litigation.”