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Avaya Loses Appeal to Set Aside Verdict over Antitrust Activity in Dialer Sales

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August 25, 2014

Avaya Loses Appeal to Set Aside Verdict over Antitrust Activity in Dialer Sales

By Tracey E. Schelmetic, TMCnet Contributor

It hasn’t been a great summer for telecom giant Avaya (News - Alert) on the legal front. Back in April, the company was the losing part in an antitrust suit against Telecom Labs, and the company’s bid to have the $20 million verdict set aside was also rejected. The company had claimed the large settlement amount was based on "impermissible speculation and guesswork." A federal judge in Camden, NJ, disagreed.

The original verdict had been split, and Avaya was found not guilty of six of the charges. It was found guilty of anti-trust activities when it came to its outbound dialer product line. The jury determined that the New Jersey-based Avaya was causing availability of patches for its dialers conditioned on the purchase of post-warranty maintenance, according to a recent article in the New Jersey Law Journal. Avaya was found guilty of refusing to sell patches to users that contracted with Telecom and Continuant, an IT services company, for maintenance. The company was cleared of charges of monopolization, conspiracy and tying the purchase of software upgrades and patches to the purchase of maintenance contracts. Continuant had originally sought damages in the $130 million to $140 million range. After the original verdict, Continuant also asked the court for injunctive relief to prevent Avaya from monopolizing the market.

Avaya’s motion to set aside the verdict was based on the way damages were assigned to the various acts, noting that the jury was incapable of reasonably estimating the damages caused by each of those acts. U.S. District Judge Joseph Irenas of the District of New Jersey disagreed.

"A Sherman Act violator can't hide behind its conduct in causing damages and argue that a plaintiff has to prove with absolute certainty and precision exactly how its conduct caused the harm," said Anthony La Rocco of K&L Gates in Newark, attorney for the plaintiff.

The long legal battle began in 2006 when Avaya sued Telecom Labs and Continuant, alleging the two companies had improperly obtained logins and passcodes to its phone systems. All of its legal claims were eventually dropped and dismissed, and the defendants turned the tables and counter-sued Avaya. This was the sixth post-trial motion filed by Avaya, all of which have been resolved in Telecom Labs’ and Continuant’s favor. Avaya, which is one of the world's largest suppliers of enterprise voice equipment in the world, has said it intends to appeal the verdict. 

Edited by Rory J. Thompson

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