Hot Topic: e.Digital Upheld Against Wencor in Second Court Judgment

First, a disclaimer – IFExpress has no legal expertise, we just wanted our readers to keep abreast of the latest news from the IFE courtrooms.

One of the hottest topics this past week is the ongoing court battle between e.Digital and digEcor taking place in Salt Lake City. As background, the suit was brought against e.Digital in 2006 alleging a number of claimed injustices against digEcor by the San Diego company. In response to digEcor’s suit, e.Digital has filed countersuits against digEcor including tortious interference and wrongful use of e.Digital’s intellectual property. To date, two motions for summary judgment have been decided by the judge in favor of e.Digital.

The firestorm between the two companies is based around the purchase of APS by digEcor folks and the now-strained relationship between the new owner (digEcor) and e.Digital. If you remember, e.Digital a state-of-the-art developer of audio and video products designed and produced (with a Korean manufacturer) the first digEplayer for APS. As we understand the argument, digEcor contends that e.Digital should be prevented from competing in the airline market space due to a Non-Disclosure Agreement that e.Digital and APS signed in early 2002 (more than two years before digEcor purchased APS). e.Digital acknowledges signing the NDA but claims that there never was any confidential or proprietary information disclosed. e.Digital is therefore asserting it is not in violation of the terms of the 2002 NDA and is free to market their proprietary eVU™ portable IFE system to the airline industry.

The suit has other points of contention, including a breach of contract, and the case remains ongoing with the outcome uncertain. The stakes are high with digEcor claiming that the airlines could be denied paid players if the outcome favors them. e.Digital responds that the legal standard to receive a temporary restraining order (injunction) is very difficult to meet and believes the facts do not support this outcome. Since the airlines were not privy to the contract between e.Digital and APS, e.Digital is asserting that it is very unlikely that any ruling from the Utah Court would affect the airlines ability to continue to use the players they purchased from e.Digital. We asked e.Digital to send some reading material that may interest your legal eagles. Read on if you are so interested:

Sent to IFExpress by e.Digital:

Information about some of the legal proceedings can be found below:

Other legal action is also being contemplated. (For more information about the digEcor complaint, see this link )

The following supporting documents are available for download on e.Digital’s website and are hyperlinked herein:

• Attachment (a) Summary Letter that provides e.Digital’s position relative to the claim for injunctive relief.
• Attachment (b) News release from APS/Wencor dated August 20, 2004 corroborating e.Digital’s position that e.Digital was/is in sole possession of the technology and intellectual property (IP) that constitute the digEplayerTM with the exception of the industrial design and case.
• Attachment (c): April 2002 NDA that digEcor has based their claim upon.
• Attachment (d): October 2002 agreement, which superseded the August 2002 NDA and includes Paragraph Q, “ENTIRE AGREEMENT”.