Out-Law / Your Daily Need-To-Know

Net2Phone and ADIR Technologies, US providers of internet telephony services, have jointly sued Cisco for alleged fraud, theft of trade secrets, unfair competition, breach of contract and breach of fiduciary duties.

The relationship between Net2Phone/ADIR and Cisco began in mid-2000. According to the complaint, Net2Phone created ADIR and Cisco entered into a strategic alliance agreement with ADIR under which they would jointly develop “a product that would make ADIR's voice-over software compatible with Cisco's hardware products, and ultimately produce a highly marketable system for internet voice-over communication.”

However, the lawsuit, filed in a New Jersey court, alleges that “Cisco had seriously misrepresented the basis on which the entire Net2Phone-ADIR-Cisco relationship was founded.” The companies’ joint statement did not disclose any more details about the nature of the misrepresentation. According to the Wall Street Journal, the allegation is that Cisco failed to make ADIR’s software compatible with its hardware. The companies are seeking both compensatory and punitive damages.

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