$60 Million Verdict Against Avaya Overturned in David and Goliath Case

The U.S. Court of Appeals for the Third Circuit overturned a district court ruling on Friday that led to a $60 million award for Telecom Labs Inc., now operating as Continuant (Tacoma, Wash.), against Avaya, then headquartered in Basking Ridge, according to an article in New Jersey Law Journal.

Avaya moved its headquarters to Santa Clara, Calif. in 2013, although it still has a presence in New Jersey.

Avaya filed the initial suit in 2006, claiming that commercial phone systems it had sold were breached by Telecom, a smaller, independent company.. The suit alleged that Telecom improperly obtained logins and passwords to service Avaya’s systems, the article noted.

“Telecom, in response, brought counterclaims for restraint of trade, alleging among other things that Avaya tried to monopolize the market for the phone systems and that it illegally tied the purchase of software patches to the purchase of maintenance contracts. A jury later sided largely with Telecom, awarding it $20 million, which was subject to automatic trebling under federal antitrust law, plus interest,” the article said.

At the time of the $60 million award, Telecom was represented by the law firm K&L Gates, led by Anthony P. La Rocco, a partner in the firm’s Newark office.

La Rocco said, “We are pleased to have been able to represent Continuant in obtaining this monumental verdict, which will result in greater choice of service and better pricing options for customers not only in the telecommunications sector but across several industries.”

Any manufacturer that seeks to control the servicing of its product after the product has been sold has now been put on notice, La Rocco said. End users should have the right to choose whom they want to service their equipment; the choice should be theirs, he added.

NJTechWeekly.com has been following this case closely and wrote about it in these articles:

Battle Over Right to Maintain and Repair Network Hardware Brewing in Camden Court

Continuant Receives Unprecedented Prejudgment Interest In Case Against Former NJ Company Avaya

Jury Awards $20 Million to Continuant in Suit Against Former NJ Company Avaya