A judge has temporarily barred sales of the new Ring Protect security and home automation system, claiming there is enough evidence to suggest Ring.com (Bot Home Automation) misappropriated intellectual property from Zonoff that in fact belonged to ADT.
In ADT Holdings vs. Mike Harris, et al, the Delaware Chancery Court enjoined the smart-doorbell maker from marketing the new system, which includes intellectual property from Zonoff, the now-defunct SHaaS (smart home as a service) platform developer.
The legal website Law360 says the move by Vice Chancellor J. Travis Laster was “a rare post-trial, predecision preliminary injunction.”
As Zonoff’s largest secured creditor, ADT had sunk more than $36 million into the company to help develop both a DIY and professionally installed smart home system. Zonoff abruptly shut down in March, 2017, with little to show for the ADT investment, according to the security giant.
Meanwhile, Ring CEO Jamie Siminoff says he paid Zonoff $1.2 million around January of this year to help Ring develop a smart-home system of its own, using the “Z1” platform allegedly co-developed with ADT.
MORE DETAILS: ADT vs. Harris and Ring.com Trial Begins
The lawsuit describes a “clandestine” meeting in the Zonoff parking lot between CEO Mike Harris and Ring representatives, where Harris reportedly handed over a USB stick containing the Z1 technology, including the intellectual property commissioned by and co-developed with ADT.
“How do you get possession of someone else’s property if it’s not authorized? It’s a crime. Right there, my client should win,” ADT attorney Steven L. Caponi told the court on Nov. 2. “This is a $50 million asset and it’s in the briefcase of a former [Zonoff] employee, handed off without authorization.”
Siminoff has claimed that the technology rightfully belongs to Ring, given the company’s $1.2 million unfulfilled contract with Zonoff just one or two months before Zonoff shut down.
After the closure, Ring almost immediately hired nearly all of the 75-member Zonoff staff.
By Oct. 2, 2017 Ring announced the new Ring Protect system – just hours after ADT launched its own DIY product in conjunction with Samsung SmartThings. Both products include interactive security and home automation, as well as battery back-up and a cellular radio, with no-contract alarm monitoring available as an option.
The Ring product undercuts ADT’s pricing by a substantial amount, establishing a monthly fee ($10) for security monitoring and video storage that is unheard of in the home-security industry.
Law360 reports – and earlier testimony indicates – that Ring believes ADT is using litigation as an anti-competitive ploy, especially given that ADT has moved on to other SHaaS platforms, including Alarm.com and SmartThings.
“They’re trying to slow roll the case,” says Ring attorney Mark C. Scarsi, in Law360's telling. “They want to make sure they keep Ring out of the market during the holiday season.”
The preliminary injunction was issued before a final ruling in the case, but Vice Chancellor Laster suggested it “would be tough” for Ring to argue that its technology does not encroach on ADT's trade secrets, according to Law360.