Crestron Countersues Savant in Response to Antitrust Lawsuit Filed Last Fall Before CEDIA

Following a federal judge’s rejection in May of Crestron’s motion to dismiss an antitrust lawsuit brought against the company by Savant Systems last fall, Crestron filed counterclaims Friday in the U.S. District Court in Boston. In the counterclaims, Crestron charges Savant with “tortious interference with contract, tortious interference with prospective business relationship, and unfair and deceptive trade practices.”

The 40-year-old Crestron said in its counterclaim: “Savant is a relatively new industry player,” having entered the market in 2005 with a home control system based around the Apple operating system. Upon its entry into the marketplace, Savant “has faced fierce competition as well as challenges associated with the recent economic downturn,” documents said. Crestron’s counterclaims also charge Savant with unlawful business practices and tactics to “shortcut” to its success in the marketplace “instead of competing on the merits of its products.” Crestron said Savant seeks to “minimize the investment and hard work typically associated with entering a new industry” and to enhance its competitive position “at Crestron’s expense."

Crestron referred to “significant investments in resources and time” that dealers and manufacturers need to make to gain business in the control industry. It claimed Savant tried to divert attention from product upgrade problems by filing its lawsuit the day before CEDIA. “It is no coincidence that Savant filed its lawsuit against Crestron after facing significant problems with its business,” Crestron alleged. It cited a Sept. 9, 2010, “Product Alert Notification” which “stated that Savant had been unable to keep apace with recent updates to the Apple operating system, and it therefore warned dealers and others to avoid upgrades to Savant products until the company could issue further guidance.” On September 22, 2010, the eve of the CEDIA conference, Savant announced the filing of its lawsuit, Crestron said in the counterclaim.

Savant’s litigation is part of a “deliberate and calculated competitive strategy to target Crestron through unfair practices,” Crestron claimed. Those practices include “interfering with Crestron’s existing and prospective contracts and business relationships by advising dealers and other customers that Crestron is engaging in anticompetitive conduct,” according to documents. Crestron also claimed Savant’s competitive strategy includes “targeted efforts to interfere with Crestron’s business by facilitating the ‘flip’ of projects from Crestron to Savant."

In a press release Friday, Crestron said it is one of the pioneers of the automation and control industry, a “highly competitive environment that has driven technological innovation and industry success over the past few decades.” Savant’s use of lawsuits and litigation tactics as a means of gaining competitive advantage in the automation and control industry “is unprecedented and disruptive to the industry,” Crestron said. Crestron said it has been forced by Savant’s “litigation tactics and continuing unlawful conduct” to protect its own interests. In response to a Savant claim in its lawsuit that “Crestron has prevented Savant from penetrating the automation and control market and foreclosed access to the established dealer channel,” Crestron said despite that claim, Savant has continued to declare success in growing its sales and dealer base. Crestron is “confident” that the truth will be exposed through the court process, it said.

In Savant’s antitrust suit against Crestron last fall (CED Sept 23 p1), Savant claimed Crestron launched a campaign to “prevent” dealers from carrying its home and commercial automation programmable controllers to “thwart competition.” Crestron, in a series of “anti-competitive business practices,” barred its dealers from selling or distributing Savant products if they wanted to continue receiving Crestron gear, Savant alleged in a 19-page suit. Crestron issued “guides” to dealers comparing its products to Savant’s devices, reminding them that “you can’t be a Crestron dealer and also sell Savant products,” the suit said. Savant did not have a comment on Crestron’s counterclaims Friday.