A year after news of HP’s first actions against brokers selling the HP 3000, another suit has surfaced with similar charges. Coverage from the Sacramento Business Journal brought to light another HP lawsuit aimed at a broker in the HP 3000 community, with charges of racketeering alleged in a civil suit HP filed in a US District Court Dec. 8. HP filed suit against Bill Conley and Russell Webster personally, and Conley’s US Computer Corp. — a computer brokerage that is now dealing only in a limited capacity in the HP 3000 business, according to Conley’s comments to the NewsWire during 1999. Four other defendants were named in the suit, including one company HP had hired to scrap used memory boards but was allegedly counterfeiting the scrap as HP equipment. The HP civil suit alleges that Conley purchased memory boards from H&H Computers of Rio Linda, Calif. which HP alleges in its suit were stolen, equipment that HP called “illegal” in its suit. HP’s suit charges that Conley then resold that equipment as HP components; the suit claims HP has recorded a phone conversation of Conley making the transaction. The complaints in HP’s suit line up with those it alleged in its 1999 suits against Hardwarehouse and Abtech Systems. The tally of HP complaints against Conley and US Computer is civil racketeering, copyright infringement, misappropriation of trade secrets, conspiracy to convert, unfair competition and illegal accounting.

While the lawsuit covers a lot of ground about illegal use of scrapped boards, it has a section more important to the HP 3000 market. The suit alleges that Conley directed a US Computer employee to “use SS_CONFIG to illegally alter HP software and servers.” The HP complaints in its suit mirror language used in its Abtech and Hardwarehouse suits of 1999, charging that US Computer directed Diablo Equipment Technology to modify 20 or 30 computers, then purchased a copy of the SS_CONFIG program needed to do this for its own use. The new suit also alleges that “Conley attempted to sell — and possibly did sell — copies of the unauthorized and compromised SS_CONFIG software to others, including Hardwarehouse.” SS_CONFIG lets an authorized engineer change the personality of an HP 9000 to an HP 3000, as well as alter user license counts of MPE/iX. HP is seeking damages in excess of $10 million per defendant.

HP relied on information and law enforcement officer testimony gathered in August of 1998 in the suit, which it filed 16 months after investigations involving Conley. No criminal charges had been filed against Conley or US Computer as of presstime. Conley remained in business at US Computer in January after the Business Journal story appeared, referring us to attorney Glenn Peterson of McDonongh, Holland & Allen in Sacramento for comments. Peterson said he believes HP has mixed defendants charged with trafficking counterfeit boards with Conley’s alleged acts regarding the 3000 to keep the case in the same California court which heard HP’s 1999 suits.

“One of the most conspicuous things about the lawsuit is the absence of personal jurisdiction over him in this district,” he said. “I don’t think it’s any accident they’ve tried to link Conley with these other claims. HP knows that venue over my client in Sacramento is extremely shaky, They’ve tried to tie him up with these other cases in order to bolster an argument that there’s some rational connection to Sacramento. I think they anticipate a challenge to venue here.” The day of finding innocence or guilt on the charges could be well into the future, he added. “We’re a long way from there,” he said. “I anticipate the possibility we might run the case through the Early Neutral Evaluation Program,” a California process that lets HP’s lawyers and the defendants’ lawyers meet to pursue talks about a settlement. Peterson said Conley was scheduled to make a plea on the suit on Feb. 2, and a pretrial meeting has been set for Feb. 28.