Lawsuit follows HP moves in 1999 case that's still moving
through court system
filed another lawsuit against defendants accused of illegal sale of
HP 3000 systems, a civil action that HP 3000 officials say is
designed to protect the value of used systems.
The lawsuit filed in US district court contains
allegations that bear a strong resemblance to HPs 1999 civil
suits filed against brokers Hardwarehouse and Abtech. HP continues to
maintain in its suits that the HP 3000 has more value than HP 9000
systems, accusing US Computer Corp. of spinning the gold of HP 3000s
from the relative straw of HPs Unix systems.
HPs suit alleges that US Computer and owner Bill
Conley used HPs SS_CONFIG program to illegally modify HP
servers. In a section repeated directly from its 1999 suits,
HPs latest lawsuit states that HP 3000 servers have
substantially more features and functions than the HP 9000 servers,
and are accordingly more valuable and sold for a higher price.
HP made claims in its latest suit that Conley and US Computer
profited by selling converted 3000 servers for that higher price
without paying HP for licensing and software on the servers.
criminal charges had been filed against Conley or US Computer as of
press time. HPs suit claims that officers discovered an
unauthorized and compromised copy of SS_CONFIG during a search
of the US Computer facility in 1998. The suit does not describe these
individuals who found the pirated software as law enforcement
officers, such as FBI agents or local police. The investigations have
been conducted through the High-Tech Crimes Task Force, a group of
California police and sheriffs.
One of the HP investigators who has been key in the broker
inquiries has been Tim ONeill. Hes not a law
enforcement official, and his part is to help the High-Tech Crimes
Task Force understand what they are seeing, and help them in their
investigation, said Christine Martino, Worldwide Marketing
Manager for the HP 3000 division (CSY).
The lawsuits HP 3000 issues revolve around the
alleged misuse of SS_CONFIG, a program capable of changing user
license levels, adding HP 3000 software, and changing the personality
of an HP server from 9000 to 3000. In the new suit, HP claims that
Derrick Eisenbeis sold SS_CONFIG without copy protection for a
wire transfer of $15,000. Eisenbeis was also named as a
defendant in HPs 1999 suit against Hardwarehouse.
Specific language describing the conversion of 9000s into
3000s is not in HPs latest suit, as it was in the 1999 suit.
Eisenbeis was accused in last years suit of using SS_CONFIG on
behalf of Hardwarehouse. This years suit accuses Conley of
reconfiguring 3000 servers for Hardwarehouse. Eisenbeis allegedly has
told HP, according to HPs latest suit, that he modified
20 or 30 computers for Conley and US Computer. Eisenbeis
was indicted for interstate transport of stolen goods in connection
with the 1999 lawsuit.
Value an issue
CSYs Martino said the division wants the latest
lawsuit to serve as a reminder that HP will protect the value of its
licensing rights, even on used equipment.
HP has gotten aggressive and is staying aggressive
about this, Martino said. This wasnt a one-shot
thing that we did eight months ago when the first lawsuits came
The marketing manager is one of four people in CSY who are
regularly briefed on the progress of the lawsuits and investigations.
The others are general manager Winston Prather, controller Betty Yee
and license transfer manager Kathy Pierson.
The level of our involvement is simply to provide
data when were asked for it. There have not been many people in
the division involved at all, Martino said.
She added that she believes the illegal activity as
alleged in the HP lawsuits is hurting all of us in the
community, and you have to be careful of who you buy from. We have an
authorized channel that is very rich. And Im not saying all
brokers are bad, and you shouldnt buy from them. But all the
illegal activity has taken place in the unauthorized portion of the
channel. Customers need to think about protecting themselves now,
with this stuff happening.
More value, but less comparing
Even though HP is direct about stating the HP 3000s
value outweighing HP 9000s in lawsuits, CSY isnt eager to make
such direct comparisons in non-legal settings. Martino said that
political considerations inside HP will keep the advantages of the
3000 over HP Unix systems modest.
Its true, she said, but you
probably wouldnt see us say that in print. We get into that
political thing of doing direct comparisons with other products. What
were trying to do is step away from that comparison and
defensive kind of posture, and say Heres the value we
bring. Its real customers solving real business problems.
We dont have to do all these comparisons. Martino said
she was sure the customers were comparing systems, but we need
to keep our nose clean. The way we compare is through a compelling
Impact on HP
Now that HP has eliminated two used 3000 hardware options,
its current suit proposes to do more of the same. It affects
HP, our partners and our customers, Martino said of the illegal
activity it proved in its 1999 cases against Hardwarehouse and
Abtech. We have authorized partners who are losing business. It
also affects street prices to some degree. Customers could buy a
system that was tampered with and not be able to get support on it.
Or have it confiscated by the FBI; this did happen. She
confirmed that such a 3000 has been seized at State Farm Insurance,
one of the largest HP 3000 installed sites.
has received repayment from its two former employees implicated in
one of the 1999 suits, Martino added. We received $200,000, and
they still owe more, she said. Abtechs executives have
also been paying on the settlement their company agreed to.
Meanwhile, one Hardwarehouse defendants case still hasnt
been tried, and another is cooperating with authorities while he has
establishing a new broker business.
Weve lost tens of millions of dollars of
revenue, Martino said. We got hurt by this, and
well minutely benefit from any good that comes out of the
One other benefit is that HP will be publishing a document
that outlines the process for license transfers of HP 3000. Martino
said it will be nice to have it on one piece of paper, so there
will be yet another source for this information. HPs
Pierson will be assembling the document, which HP promised to forward
to the NewsWire.