Logicom, IPlanet Dispute Deal

Solution provider Logicom Technologies is scheduled to enter mediation this summer to resolve a lawsuit it filed last July against iPlanet over a contract dispute. IPlanet is an alliance between Sun Microsystems and America Online/Netscape.

THE BATTLE LINES ARE DRAWN • February 1999: Logicom Technologies wins e-business project with Jim Henson Productions.  • May 2000: Logicom brings in iPlanet to assist with project.  • June 2000: Jim Henson Productions pulls out of contract.  • July 2000: Sun and Intraware settle financial dispute; Logicom files suit against iPlanet.

Logicom filed the suit July 21, 2000, after Sun failed to pay Logicom a 3 percent finder's fee on a $4.66 million software and hardware sale to Jim Henson Productions, a New York-based media company and Logicom client.

A suit Logicom simultaneously filed against Jim Henson Productions also is pending.

According to the iPlanet suit, Logicom contracted to build an e-business solution for Jim Henson Productions in February 1999 and brought in Sun and iPlanet as partners in May 2000.

Vince Hruska, a Logicom director, says that when Jim Henson Productions unexpectedly pulled out of its contract last June, Logicom and iPlanet engineers already had begun work on the project and Sun had already received payment of $4.66 million for software and hardware.

After Jim Henson Productions backed out of the deal, Sun made the decision to not sue the company for breach of contract and worked out a settlement with its underwriter, Intraware, over the software and hardware, says Hruska. Intraware acted as a middleman in the sale of software and hardware to Jim Henson Productions. Sun, however, failed to fulfill its deal with Logicom and pay the finder's fee, Hruska says.

"Basically, our position is that it's fine for people to cancel contracts and for Intraware and Sun to accept that," Hruska says. "But it's also important to understand that [Sun] leaves people hanging in situations when a little firm like [Logicom] takes a $10 million contract to them and invites them to the party, and leaves us . . . hanging with the problem."

A Sun spokesperson says Sun is viewing Logicom's suit as a contract dispute and the case has no merit.

Sun promised it would "take care of Logicom" when Jim Henson Productions unexpectedly canceled the deal, Hruska says.

While Logicom didn't have a formal contract with Sun outlining the terms of their deal, it does have evidence through written communication about what the deal entailed, DesJardins says.

"There are numerous writings going back and forth between parties in the form of hard copies and e-mails which evidence the terms of the contract," he says. "Is there a legally enforceable contract? We say there is."

Solution providers can avoid similar litigation with vendors when a client pulls out of a contract by creating a formal contract with the vendor rather than going on good faith and written and/or verbal communication, DesJardins says.

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