Mitel Sues ShoreTel (Again)
In 2007, Mitel filed suit against ShoreTel alleging patent infringement on the same day of ShoreTel's planned NASAQ IPO. ShoreTel responded by delaying its IPO and filing a counter-suit of patent infringement. ShoreTel claimed Mitel's suit was timed to interfere with its IPO, and further sought an injuction against Mitel from making false and misleading statements to derail its rescheduled IPO. The ShoreTel IPO took place about a month later in July 2007. The suits were settled with a cross licensing agreement in 2009 with few details disclosed.
Now, prior to Mitel's planned IPO, Mitel filed suit against ShoreTel for making "false or misleading statements about Mitel". The strategy is probably a preemptive strike to protect its IPO, but there are so few facts known about this case that the motivation or actual claim is anybody's guess. In a memo sent from Mitel CEO Don Smith to partners on Friday, he explains "Mitel felt compelled to take this action to protect Mitel's reputation and brand, our current and future business opportunities, as well as those shared among our channel partners, strategic alliances and customers." The majority of the letter served as a reminder of Mitel's Code of Conduct.
Neither Mitel or ShoreTel released any information about the current claim.
It reflects the increasing competitiveness in the telecom CPE market. Nearly all telecom equipment makers saw revenue drop in 2009. The market gorillas Avaya, Cisco, Microsoft, and Siemens Enterprise are boxing in one corner and open source telephony players such as Digium are increasing market share in the other. The pressure on the other players is tremendous. Mitel intends to use funds from its IPO to repay its revolving credit line and other loans, and to make acquisitions. No date has been set for Mitel's IPO.