Clipsal the owners of the C-Bus home automation system has been accused in the Federal Court of systermatically stealing technology from as far back as the early 1990’s. Now a small Perth based technology wants $2billion dollars in back payments.
In late 2003, the Clipsal brand was sold by Gerrard Industries to Schneider Electric the world’s biggest electrical company, Clipsal is now a major player in global markets with the C Bus system generating million in revenue.
The Perth technology firm called Smart Company have told the Federal Court in Adelaide that Clipsal, which the Gerard Family sold in 2003, had been stealing technology since the late 1990s and had failed to pay up to $2billion in licence fees. Smart Company accuses Clipsal of breaching a technology-sharing agreement signed in 1996, and using the technology in one of Clipsal’s most successful products, the C-Bus II home automation system.
According to the Australian newspaper Robert Gerard a friend of the Prime Minister and former owner of Clipsal has been drawn into the $2 billion court dispute and could soon find himself in the dock being quizzed by lawyers for Smart Company. Early in 2006 Robert Gerard was forced to resign as a Reserve Bank board member after revelations of a multi-million-dollar tax dispute.
When Clipsal was sold to Schneider Electric Mr Gerard was chairman of Clipsal, his son Simon Gerard was general manager and nephew Jason Gerard was head of research and development. Jeremy Roberts of the Australian newspaper is covering the case. He wrote, Documents in the court file reveal that Simon Gerard and Jason Gerard were intimately involved in fighting the dispute from 2002.
And they show that when the Gerard family decided to sell its controlling share of Clipsal to a French multinational in August 2003, the dispute escalated into a court action. The sale reaped $375 million for the Gerard family, whose ancestor Alfred Gerard started the company in 1920 as an electrical fittings maker.
Simon Gerard stayed on as general manager of Clipsal until February this year. Jason Gerard, Simon Gerard and Rob Gerard now work at the family company Gerard Corporation and have no major shareholding in Clipsal.
Clipsal’s new owner, Schneider Electric, is now dealing with the Smart Company litigation.
“It is a case of considerable scope and substance and each party will incur considerable costs in fighting it,” counsel for Clipsal Richard Cobden told the Federal Court on July 17. “Although presently the damages are not particularised in the statement of claim, they were in the first version of the statement of claim particularised at some $2 billion.”
The case has been crawling through the Federal Court for more than a year as Clipsal tried to convince the court that the owners of Smart Company could not afford to fight it.
In December 2001, Smart Company entered voluntary administration and was bought the following year by expatriate Greek entrepreneur Sotirios Portellos, who lives in Adelaide.
He and two other directors have signed “guarantees” for the court valued at more than $1 million, made up of property in Australia and Greece, cash, cars, investments and an opal collection.
The executive general manager of Clipsal, Erik Scholz, declined to return calls or reply to emailed questions about the case. The Gerards also refused to comment on the case.
The Federal Court file runs to thousands of pages. It includes an affidavit dated March last year by Jason Gerard, which shows him refusing to dig up documents requested by Smart Company.
“From my extensive knowledge of the records of Clipsal which comprises design briefs … schematic diagrams … I estimate that the volume of documents which relate to the development (of C-Bus II) is in excess of 85,000,” he said. “The task (of discovering those documents) would take many, many months and thousands of man hours.”
According to the minutes of a May 2004 meeting, Simon Gerard advises Smart “not to worry” about their concerns and that they should “move on”. In a letter from Simon Gerard in the same month he says: “Our lawyers have advised that Smart has absolutely no rights to the C-Bus technology and we therefore regard your claims to be misconceived and spurious.”
the court case is set to continue.
See Australian story at http://theaustralian.news.com.au/story/0,20867,20347796-2702,00.html