Vision and Maxava Prep for November Trial

August 8, 2011 Alex Woodie

IBM i high availability software rivals Maxava and Vision Solutions will be back in a Los Angeles courtroom today to hear a judge’s ruling on the discovery process in Maxava’s false advertising case against Vision. Disagreements over what documents should be admitted as evidence have delayed the case. The cut-off for discovery is slated to end Friday in preparation for a November 22 trial.

There is no sign that the false advertising case that New Zealand-based Maxava brought against its much larger Southern Californian competitor in December 2009 is any closer to an out-of-court settlement, as the vast majority of civil cases are resolved. Both sides appear to be hunkered down, content to let their lawyers wage legal warfare in the United States District Court, Central District, Western Division.

The action picked up in July, when the two sides made no fewer than 22 filings. Most of the filings had to do with the discovery phase of the suit, the end of which has already been delayed twice. A good fraction of the documents submitted to the court were concealed from the public, which is a result of the protective order the judge issued this spring to prevent both sides from revealing the names of customers and prospective customers, price lists, and anything else the parties deemed worthy of the attorney’s eyes only (AEO) label.

On July 15, Vision petitioned the court to sanction Maxava over failures to comply with a February court order to produce materials requested by Vision as part of the discovery process. In its filing, Vision accused Maxava of “playing chicken” with Vision regarding documents and deadlines and of purposely destroying evidence.

Maxava has failed its discovery obligations in three ways, Vision says, including failing to produce documents it has already admitted to having, failing to produce un-redacted versions of documents, and failing to provide a good explanation of why it hasn’t produced documents. Vision has requested the court punish Maxava by preventing it from making any discovery requests of its own and by taking away its ability to depose the defendants, among other actions.

Maxava, meanwhile, defends its actions in discovery, and claims that it has submitted all required documents, even if some of them were submitted after the court’s deadline. It also leveled its own accusations against Vision, accusing the company of refusing to remove redactions from hundreds of documents and abusing the AEO privilege, “thereby preventing Maxava . . . from viewing hundreds of documents it has a right to review.”

The discovery process is proving to be a critical and hotly contested phase of this case, which started out as a false advertising claim but expanded into accusations of trade libel, interfering with prospective economic advantage, and anti-competitive, monopolistic behavior in violation of the Sherman Act in subsequent revisions to the original claim. Sirius Computer Solutions, a Vision business partner and a large IBM Power Systems reseller, has also been named in the case.

Maxava’s case hinges on whether it can prove that it lost business to Vision as a result of several documents that Vision put together that denigrated Maxava’s products and its ability to support its customers, which Vision and Sirius employees showed to existing customers or prospects.

Originally, Maxava cited three organizations–Cleveland Golf, Panda Restaurant Group, and Hyundai Information Service North America–that were swayed by the Vision pitch to not purchase IBM i high availability software from Maxava in the pre-2007 timeframe. Maxava also claimed that it was unable to form a partnership with a reseller, Progressive Technology, as result of Vision’s alleged actions.

But Maxava has said that it expects to find more customers that were swayed by Vision’s allegedly illegal sales and marketing tactics. It’s relying on the discovery process to help find more evidence of a “purposeful, planned, coordinated, and widespread competitive misconduct toward Maximum,” Maxava’s lawyer wrote in February.

Not surprisingly, this legal tactic has drawn heavy resistance from Vision and its lawyers, which has led to the drawn-out discovery phase. Every company is possessive over its most sensitive, proprietary information, and Vision obviously doesn’t want to help make Maxava’s case.

Maxava, which won a temporary injunction against Vision last year, seeks a permanent injunction and monetary damages from Vision and Sirius. It has also requested a jury trial–an event that, at this point, appears to have a good chance of occurring.