RAND Sues PTC
reprinted by permission of Ralph Grabowski, editor
June 10, 2003
Rand Technologies has launched a lawsuit against PTC. Rand has been PTC's largest distributor of Pro/E and related services, but recently PTC moved aggressively to broaden its dealer network. PTC has been trying to reverse its fortunes by refocusing on its CAD software, Pro/ENGINEER and by broadening its distribution.
One move by PTC was to amend its distribution agreement with Rand: PTC reduced Rand's right to sell in specific territories, and shortened the distribution agreement by nearly two years - to December 31, 2003.
At the time that PTC announced the changes, I was surprised at Rand's seeming acquiescence. On May 31, however, it was no more Mr. Nice Guy. Rand’s lawsuit asks for $100 million US in damages. Specific points from Rand's filing:
- PTC engaged in a worldwide campaign designed to destroy Rand's business, and to deprive Rand of its rights as a PTC reseller and distributor.
- PTC employees and agents around the world made false and misleading statements about Rand in connection with a scheme designed to cause Rand customers to buy PTC products and services from PTC, or other resellers and distributors.
- PTC improperly sold products and services into Rand's exclusive accounts and territories.
- PTC made fraudulent misrepresentations designed to induce Rand to transition out of selling PTC products, and to forfeit rights as a PTC reseller in North America, Western Europe, Australia and Asia.
PTC responds: "We believe the claims are without merit and will contest them vigorously, but we cannot predict the ultimate resolution of this action at this time."
In related news, Rand intends to sell one of its wholly owned subsidiaries to the managers. RAND Technologies GmbH of Germany employs 183 people. During its last fiscal quarter, the subsidiary had revenues of $14.4 million CDN and a net loss of $876,000 CDN.
In further related news, PTC names Neil Moses as its new chief financial officer and executive vice president. Mr. Moses was previously CFO at Axcelis Technologies, a semiconductor equipment manufacturer.