Although a related judgement order wasn’t officially signed by a Federal judge at presstime, we received a copy of a resolution agreement between Hewlett-Packard and Abtech, one of the three used 3000 resellers sued by HP in March on allegations including copyright infringement, civil racketeering and misappropriation of trade secrets. The agreement signed by both parties and filed with the US District Court on May 6 included a section in which Abtech’s president Robert Russell agreed to a stipulated judgement of $300,000 against him and Abtech agreed to pay a stipulated judgement of $600,000 against the firm.Terms of the agreement, which was signed by a Federal judge but didn’t have his signature yet on the orders to officially enter the judgements against Russell and Abtech, state “Abtech stipulates that a judgement in the amount of $600,000 may be taken against it in connection with [HP’s] damages for lost licensing and reconfiguration fees, general damages and attorney’s fees.” The agreement filed in the court further states that Abtech president Robert Russell “stipulates that a judgement in the amount of $300,000 may be taken against him in connection with [HP’s] claims for damages in this action. These agreed upon figures constitute a settlement of the disputed amount of damages owed to [HP] in this action.”

HP’s corporate media relations staff wouldn’t comment much on the agreement they faxed to the NewsWire’s offices. “Abtech has agreed to have a judgement taken against it, and in favor of HP's lawsuit,” said a media spokesperson. HP is waiting until the Federal judge signs the orders for the judgements before further commenting on the legal action against Abtech.

Abtech first broke the news of its resolution by issuing a terse press release on May 6, and spoke with us in an interview that day. Company spokesperson Tracy Winter said that the agreement stops the Carlsbad, Calif.-based company from reselling any more HP 3000 equipment or offering support services to new customers. She said the agreement gives Abtech the right to retain its current support customers, as well as continue to resell used HP 9000 systems.

“We have come to a resolution with them and we have an agreement to continue business in the HP world, but not with the 3000,” Winter said. “We have on our own agreed to get out of the 3000 business. They did not force us out, but there’s a lot of things surrounding the operating system that are a little questionable. Up to this time, HP has never offered any guidelines on how to handle MPE and the HP 3000 business. Until they do so, it’s probably better that we don’t resell, support or train on those systems.”

Language in the resolution agreement is more explicit about Abtech’s exit from HP 3000 sales. In addition to the $900,000 in judgments Abtech and its president agreed to, the document states that Abtech is “prohibited from selling leasing, renting, shipping or receiving any Hewlett-Packard 3000 computer system of any class and any operating or application software for use on such a system unless [Abtech] is able to establish to HP’s reasonable satisfaction that said system or software has been properly and legally configured or licensed.” Other language in the agreement makes Abtech notify customers leasing or renting HP 3000s that Abtech will be terminating the lease or rental in 30 days — unless it can satisfy HP the lease or rental is legally configured and licensed. The agreement also puts Abtech on a budget to operate its business and permits Russell to spend up to $20,000 a month on reasonable living expenses. A written report must be delivered to HP on the 16th of each month regarding Abtech’s income and expenses

Abtech offered price-competitive alternatives in all three areas to HP customers, selling systems, support and training at costs well below HP’s prices. In training, Abtech was running five-day HP 3000 classes in programming, TurboIMAGE, 3000 management and administration skills, offering a class in its San Diego facility for $1,495. Abtech did even more on-site training, which coordinator Tim Lundquist said last year was used by companies in a wide variety of business segments. “Eighty percent of the training we do is on the HP 3000,” Lundquist said. “There’s so much competition in other markets for training, and not much on the 3000 side.”

The Abtech press release said little about the agreement and nothing of judgements. “Abtech Systems, Inc. and Hewlett-Packard have finalized an agreement to resolve issues,” it stated. “In March 1999, Hewlett-Packard made certain allegations primarily concerning Abtech’s sales of HP 3000 systems. HP’s allegations were centered on a small percentage of Abtech’s overall sales. Abtech takes pride in the integrity of its business practices and is operating in compliance with Hewlett-Packard guidelines and all state and federal laws.”

“They’ve allowed us to move on,” Winter said. “Since they have agreed to resolve this with us, it has brought on a better relationship. I don’t know what will happen on the Federal side.” HP has been investigating Abtech with the support of the FBI, but no indictments have been handed down against Abtech regarding that investigation. Winter noted that HP had made allegations against other resellers and its own employees concerning charges of bribery in a separate lawsuit. Hardwarehouse of Dallas, Texas, and former HP employees Deborah Balon and Marc Loriau were accused of paying and receiving more than $100,000 in bribes in that other lawsuit. “Our [allegations] were pretty much solely surrounding the HP 3000 hardware, which is a small percentage of our overall business,” Winter said. “Once HP realized that, I think they felt a little better about the situation.” Abtech must surrender all copies of HP’s proprietary SS_CONFIG program as part of the agreement.