SANTA BARBARA, Calif., Nov. 3, 1997 - Green Hills Software,
Inc., an industry-leading supplier of software development tools for
embedded applications, announced today that it has demanded binding
arbitration of a long-standing legal dispute with Integrated Systems,
Inc. (ISI)(NASDAQ: INTS), a value added reseller (VAR) of Green Hills
products.
Green Hills alleges that Integrated Systems, Inc. is violating the companies' current VAR Agreement by their marketing of pRISM+, ISI's recently released software development tools product line. Green Hills is seeking an injunction against ISI's marketing of pRISM+, in addition to $30 million plus punitive damages.
Green Hills claims that ISI has damaged Green Hills' reputation for
quality, reliability, and support by refusing to ship updates and new
releases (Version 1.8.8) of Green Hills products that provide enhanced
performance, new features, better documentation, and bug fixes. "ISI
has denied many of its customers the updates and bug fixes that they
have paid for under their maintenance contracts," said Dan O'Dowd,
President of Green Hills. "I believe it is irresponsible for ISI to
continue to ship old releases that contain known bugs that have long
since been fixed. I am deeply concerned about ISI customers who
develop life support systems."
Green Hills also claims that ISI is contractually obligated to promote
Green Hills products ahead of competing products. Green Hills asserts
that ISI violated this obligation by secretly acquiring several
competitors of Green Hills and integrating their products to create a
new product, pRISM+, in order to compete with Green Hills. Green
Hills is seeking an injunction mandating divestiture of these
subsidiaries.
Green Hills maintains that since ISI resells Green Hills products
under the name "pRISM," ISI's use of the name "pRISM+" to identify
ISI's new product, which contains no Green Hills products, is
misleading and confusing. "By use of the name pRISM+, ISI is
leveraging the market awareness and appeal of the pRISM name, even
though ISI has refused to incorporate any Green Hills products into
pRISM+," said John Carbone, Green Hills Vice President of Marketing.
"Customers buying pRISM+ may think that they are getting a Green Hills
upgrade, only to discover that pRISM+ contains no Green Hills products
at all." Green Hills is seeking an injunction against ISI's use of the
name pRISM+ for products that contain no Green Hills products.
Green Hills contends that ISI is in breach of its contractual
obligation to spend more money marketing Green Hills products than it
spends marketing competing products. Instead, ISI spends far more
money promoting pRISM+ than it spends promoting Green Hills products,
and has rarely even mentioned Green Hills products in recent ISI press
releases, trade show booths, mailers, and literature kits. "Many
customers have informed us that ISI sales people are now actively
discouraging sales of Green Hills products in favor of pRISM+," said
David Chandler, Green Hills Vice President of Sales. Green Hills is
seeking an injunction to prevent ISI from promoting its competing
products ahead of Green Hills products.
"In my view, ISI's failure to live up to its contractual commitments
has already cost Green Hills millions of dollars in lost business,"
said O'Dowd. "Our mutual customers are also suffering from ISI's
failure to live up to the terms of our Agreement. Our objective is to
continue our relationship with ISI by keeping the VAR Agreement in
effect and having ISI focus on supporting our mutual customers. If
ISI continues on its present course, the future damages to Green Hills
and our mutual customers may well be incalculable."
For sales information on Green Hills Software's products, please call 1-805-965-6044 or email inquiries to sales@ghs.com.
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