ADT vs. Mike Harris: Court Battle for Ring’s IoT Assets Begins
IoT trial commences for ADT Holdings vs. Mike Harris, regarding Ring’s (Bot Home Automation) acquisition of Zonoff’s Z1 home automation platform.
The Case in Brief
Since the Delaware Chancery Court does not make it easy to obtain legal documents — and because most of the documents in this case are sealed — we have summarize the lawsuit here, based on an artical in Law360 in August of this year.
Some documents unsealed in a lawsuit by ADT Holdings against Zonoff and Ring.com, read something like a spy novel – an alleged “clandestine” meeting in a parking lot, a “fraudulent transfer” of home-automation technology, and a “brazen theft” of intellectual property orchestrated by former Zonoff CEO Mike Harris.
Law360 reported on the recently unsealed document in August, which CE Pro was unable to obtain.
In May, the giant security and home-automation provider ADT Holdings sued Harris and Ring after Zonoff, a promising IoT platform provider, shut its doors.
ADT says it was Zonoff’s largest secured creditor at the time, holding first-lien security interests in Zonoff, including tangible and intangible property. As ADT alleges in court documents, Zonoff was in default on the secured loans and therefore owed ADT the security and interests in the Z1 platform.
“We’re more harmed in this than anyone. We spent money in advance, and shortly thereafter they stopped funding it.”
ADT accuses Harris of surreptitiously handing the Z1 files on a disc to someone from Ring – in a “clandestine parking lot handover” – after Zonoff was in default, and without permission from the Zonoff board.
“Ring acquired for $0 the Z1 platform with the goal of developing competing products,” claims ADT.
In return, Harris got a “lucrative” job as president of the new “Ring Solutions” group.
Ring CEO Jamie Siminoff told CE Pro in May there was nothing clandestine about the transfer of Z1-related computer code. Ring was simply collecting the goods it had already purchased from Zonoff.
“There was nothing stealthy about what we did,” he said at the time. “We had a contract with Zonoff. … The money we put up was very large for our sized company. The contract was done as ‘normally’ as you would do with any company.”
Siminoff says he and Harris began work on a Z1-based Ring application in January of this year, telling CE Pro, “We’re more harmed in this than anyone. We spent money in advance, and shortly thereafter they stopped funding it.”
ADT moved in May for an injunction against Ring’s use of Z1-related technology. Ring countered with a request for a full and speedy trial instead.
Law360 quotes from Ring’s filing: “Ring is expressly entitled to possession and use of the complete source code and related documentation and materials as necessary to support the development and use of the Ring App and related services, specifically including the Z1 Platform.”
Ring decried ADT’s request as an effort to “simply disrupt Ring’s business with a temporary injunction in an effort to keep an up and coming competitor out of the market, without regard to final resolution of their own claims.”
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