HP gets judgement, criminal charge, guilty plea in actions against brokers

HP is getting some reparations from one of the three companies it’s suing over alleged HP 3000 license infractions — and federal charges have been filed against two of the other defendants named in HP’s suits.

A resolution agreement signed May 6 by Hewlett-Packard and officials of Abtech Systems of Carlsbad, Calif. assigns a judgement of $900,000 in total against Abtech and its president, Robert Russell. Abtech agreed to a stipulated judgement of $600,000 against the firm, and Russell agreed to pay a stipulated judgement of $300,000 against him personally. HP agreed the payments “constitute a settlement of a disputed amount of damages owed to [it] in this action,” court documents stated.

Another defendant named in the HP suits has been indicted on federal charges. Derrick Eisenbeis of Diablo Technology has been charged with interstate transport of stolen goods in connection with the case, according to his attorney. Eisenbeis, named as a defendant in the HP lawsuit against Hardwarehouse, remains free on his own recognizance.

Several weeks earlier, one of the defendants in the other lawsuit which HP filed entered a guilty plea agreement with the Federal Court in the State of California.

John Adamson, co-owner of Hardwarehouse of Dallas, Texas, entered into a plea agreement with US Attorney Paul L. Seave, pleading guilty to two counts of mail fraud. The agreement, signed on April 23, states that Adamson delivered an HP license transfer authorization form by mail on April 17 and August 4, 1998. Delivering the authorization by mail meant Adamson “did knowingly devise and intend to devise a scheme and artifice to defraud [HP],” according to the agreement Adamson signed.

By signing the agreement, Adamson got the US government to agree “not to further prosecute the defendant for schemes charged in this information.” The cumulative maximum sentence for the fraud in Adamson’s case is 10 years of incarceration, a three-year period of supervised release, a fine of twice the gross loss to the victims for each of the offenses, and a special assessment of $200.

Signing the agreement gives Adamson a chance to reduce his sentence by one to six months in exchange for “the defendant’s substantial assistance in the investigation and/or prosecution of others.” The plea agreement states that Adamson committed one count of mail fraud “to defraud the Hewlett-Packard Company of substantial licensing fees through the unauthorized use of its confidential and proprietary software program, SS_CONFIG.”

The plea agreement that Adamson signed also give the US District Court the right to require him to make restitution to HP.

HP’s resolution agreement with Abtech forced the broker to surrender all copies of SS_CONFIG, as well as any illegal copies of IMAGE/SQL, MPE/iX and Allbase/SQL. The agreement which Abtech signed also prohibits the company from “selling, leasing, renting, shipping, or transferring any Hewlett-Packard 3000 computer system of any class,” as well as any copy of MPE/iX — unless Abtech can satisfy HP that the MPE/iX license is legal. Abtech also must return HP 3000s to HP which it leased to customers, unless it can prove “such processors and/or software have been properly and legally configured and licensed.”

The resolution agreement leaves Abtech with its HP 9000 business. But the company must operate under a budget submitted to the court as part of the agreement while it pays off its judgements.

Stipulated judgements to be paid by Abtech and Russell in the agreement are “in connection with HP’s damages for lost licensing and reconfiguration fees, general damages and attorney’s fees.”