JANUARY 13--Logical Solutions (Milford, CT; www.thinklogical.com), developer and manufacturer of server-management products, recently announced the positive resolution of the lawsuit filed by competitor Lantronix Inc. In June 2001, Lantronix acquired Lightwave Communications Inc. Following a period of employment with Lantronix, in the fall of 2002, many of the former shareholders and employees of Lightwave Communications began employment with a new company, Logical Solutions Inc. Shortly before the separation of their employment with Lantronix, the former shareholders of Lightwave Communications received a full and general release from all contractual obligations to Lantronix, specifically including a release and discharge of any contractual restrictions on competition. The release was signed by Lantronix president and CEO Marc Nussbaum in July 2002.
In March of 2003, Lantronix filed a lawsuit in the Connecticut Superior Court against Logical Solutions and eight of its shareholders and employees. Lantronix sought injunctive relief and substantial monetary damages, essentially claiming that Logical Solutions and its employees had violated contractual obligations, misappropriated trade secrets, and otherwise engaged in unfair trade practices. Shortly before trial, Lantronix voluntarily withdrew all of its claims against four of the eight individual defendants, and six of the 10 claims it originally made against the remaining four defendants.
On December 11, 2003, the court issued a ruling in favor of Logical Solutions and its shareholders on all claims asserted by Lantronix. The court specifically found that the defendants had not misappropriated trade secrets, improperly interfered with Lantronix's business relationships, or engaged in unfair competition or unfair trade practices. Instead, the court fully accepted the defendants' contention that they were entitled to compete in the console server market because they did not improperly use any trade secrets, and because Lantronix released them from any contractual obligations precluding direct competition.