If you’ve tried to stay on top of the legal battle that has raged between rival portable in-flight entertainment (IFE) manufacturers DigEcor and e.Digital, then God Bless You. It has been a messy, multi-year spat that will culminate in a 4 May trial.
I had the opportunity to speak with DigEcor president and COO Brad Heckel this morning and he was very candid about the whole situation, admitting that, in retrospect, “This has been a waste of time. It has been very non-productive for both sides.”
Additionally, says Heckel, the case has “been a distraction, as [DigEcor] has had to dedicate resources to it” such as staff.
The company remains productive, and is eyeing further expansion. But Heckle believes that, “had this [case] not been an issue that we had to deal with, we would have been even more successful”.
So how did it all come down to this? In April 2007, I took the time to interview both sides for an article that ran in Air Transport Intelligence. I managed to boil down the dispute to three key paragraphs, which I’ll use again today.
California-based e.Digital operated behind-the-scenes in the portable IFE market for years. The company played a role in the design and manufacture of the original DigEplayer 5500 handheld unit for system provider DigEcor, the successor to APS that was bought by US aircraft parts distributor Wencor in 2004.
But e.Digital’s decision to later offer its own handheld system, dubbed eVU, directly to airlines, ignited certain legal action.
At the heart of some of the litigation is an April 2002 non-disclosure agreement signed between APS founder William Boyer – an Alaska Airlines baggage handler and the brainchild behind the DigEplayer idea – and e.Digital. The agreement forbade e.Digital from competing with him for seven years after termination of their relationship.
E.Digital argued that none of the agreements with DigEcor precluded or limited its marketing of eVU. It also believes the non-disclosure agreement was superseded by a subsequent October 2002 agreement that later expired.
DigEcor claims that there was a period of time when e.Digital was peddling its own portable player “to our same customers” when they were contracted to deliver players to DigEcor, but didn’t.
Fast-forward to last month, and it turns out that the non-compete probably wasn’t worth the paper it was written on. A partial ruling from a federal court in Utah dismissed DigEcor’s claim that e.Digital breached a covenant of non-competition. Why?
According to DigEcor, rather than apply the law of Washington State – where DigEcor is incorporated and the agreement was signed - the court made the decision to apply the law in California, which happens to be the only state in the United States that does not honour non-competition contracts.
So what is DigEcor hoping to gain when outstanding issues go to trial next month? In addition to damages, the company wants “acknowledgment that we had an order in place, and they [e.Digital] were selling their players when they couldn’t deliver ours. Getting that recognition would be one of the emotionally gratifying aspects”.