AVG and AutomationDirect in Legal Battle

Two direct sellers of automation equipment trade salvos in court and in the press over alleged breach of partnership obligations and trademark infringement.

A legal dispute between two direct-sales suppliers of automation products became public recently, when AVG Automation and AutomationDirect both issued press releases describing litigation involving alleged improprieties by the other.

On Oct. 18, Bettendorf, Iowa-based AVG said it filed suit in federal court in Illinois in September 2005 against Cumming, Ga.-based AutomationDirect.com Inc., its chairman, Timothy Hohmann, and its Japanese parent, Koyo Electronics Industries Co. Ltd., contending that AutomationDirect secretly developed a new touch panel during the period of its partnership with AVG, in violation of its obligations to AVG. AVG alleged the AutomationDirect panel to be a “knock-off” of an AVG design.

AutomationDirect responded with an Oct. 20 press release, stating it believes the AVG lawsuit to be without merit, and that it intends to prove that in court. AutomationDirect also said it filed a lawsuit in federal court in Atlanta in April 2005 against AVG’s EZAutomation division, alleging trademark and copyright infringement, as well as false and deceptive advertising. AutomationDirect said that it had previously refrained from making any details of this earlier lawsuit public “since legal issues should be handled in court and not in other venues.”

In its Oct. 18 release, AVG said it filed a Request for Preliminary Injunctive Relief to stop distribution of the new AutomationDirect panel, which AVG alleged to be a copy of an AVG design. AVG alleged that AutomationDirect and Koyo worked secretly to develop a “knock-off” of the AGV-designed and manufactured EZTouch product line. AGV manufactures the EZTouch products in Bettendorf, and said it believes that Koyo is manufacturing the alleged knock-off, called C-More, in China.

In its Oct. 20 release, AutomationDirect said that it “voluntarily agreed to the entry of the Temporary Restraining Order that delays for a few days the launch of our C-more products so that the court would have a chance to hear the merits of the case.” AutomationDirect said the terms of the 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,” said the AutomationDirect release, which the company described as “an effort to set the record straight.”

In other news, AVG announced that it will expand its EZAutomation business in the first quarter of 2006 with 10 new product lines, including sensors, encoders, time delay relays, counters, power supplies and other products. AVG President and Chief Executive Officer Shalli Kumar said EZAutomation will become a full automation supplier, offering “price buster” automation products, including unique features at low price points.

In addition, Kumar announced the acquisition of Genius Automation, one of India’s largest system integrators and automation distributors, with 100 employees headquartered in Bangalore.

More in Home