Stallion, Digi dispute hits Supreme Court

A legal tussle between Australian networking company Stallion Technologies and Nasdaq-listed rival Digi International has spilled onto Australian shores.

Digi has launched an action in the Queensland Supreme Court alleging that Stallion's ePipe and EasyServer II connectivity solutions infringe on Digi's patents.

Besides patent infringement, Digi is claiming misleading conduct by Stallion under the Trade Practices Act.

Digi's decision to take on the Brisbane company in its own backyard is the latest move in an extended legal battle between the two businesses going back nearly a year.

Stallion fired the first shot when it sued Digi in a California court for alleged patent infringement. Digi responded by filing with its own patent infringement claims against Stallion in Digi's home city of Minneapolis.

Digi's Portserver and Portserver II products compete against Stallion's in the terminal server market, where Stallion has sold many thousands of its ePipe series for small and medium businesses.

The two companies were both founded in the mid-eighties but are now considerably mis-matched in size. Publicly listed Digi expects to turn over about $US130 million this financial year and employs about 525 people. Privately held Stallion has a staff of 45, one-third of which are in its California office, and it does not publicly reveal revenues. A major shareholder is Colonial First State Private Equity, now owned by the Commonwealth Bank.

Stallion director and co-founder Tony Merenda declined to comment on Digi's lawsuit. It is understood that Stallion has yet to enter a defence against the Supreme Court action, which was filed on August 10.

Stallion's legal firm is Phillips Fox while Mallesons Stephen Jaques partner John Swinson is acting for Digi International.

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