Thursday, June 28, 2007

Shoretel IPO Roadblock - Mitel Launches Lawsuit

I just got back from Mitel's customer/analyst conference this morning, and have not been able to blog until now. I've got a backlog of things to post, but this one has to be first. I got wind of this late yesterday - Las Vegas time - but wasn't able to post about it until now. This may well be the first you've heard about this story.

Basically, Mitel is suing Shoretel big time for patent infringement, and the news hit the wires late yesterday.

In the enterprise telephony vendor space, this is a big one. There's not much detail in the press release - no surprise there - but there's been some difficult history between these companies, and it looks like Mitel has strategically timed this release in advance of Shoretel's planned IPO.

Seems very similar to the tacks a number of service provider threw in the road just around Vonage's ill-fated IPO last year. It's another example of how tough it is to go public these days, and it's too early to know if Shoretel was blindsided here, or just felt these patents would never be an issue. More to come, for sure....

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ipcom said...

Posted by: Ed

Sounds like Mitel has sour grapes and is out to get their number 1 threat. Their technology is outdated IMO against shoretel's. As far as the suits go, they haven't named anyone else in the suit..e.g. cisco, nortel which use very similar features that are supposedly "infringed" upon. And in the case of the first patent it was filed after shoretel had already developed their technology and there is plenty of prior art on that technology.

ipcom said...

Posted by: Graham

No IMO about it - Mitel's VOIP tech is outdated. This is about market share - if Shoretel's IPO doesn't go through, they will face a tougher market time, and if Mitel's action is successful it'll be more difficult still. Unfortunately for Shoretel the holder of the patent is king and (legally) it's unlikely to make any difference who did the work.

Mitel won't go near Cisco or Nortel. Mitel would be crushed if they tried.

ipcom said...

Posted by: Mike Harrigan

Looks like the legal but unscrupulous business tactics that pervade US business has drifted north of the border. Every IP phone company and voice mail company is in breach of these patents that were taken out 10 years ago. Isn't it remarkable that Mitel chose the very day of ShoreTel's IPO to file a patent infringement suit? And only against ShoreTel? This doesn't help anyone, even Mitel. They should be ashamed.

ipcom said...

Posted by: Industry Insider

Sounds like the Shoretel employess love to read this site. Who else could possibly claim familiarity with the code base of both Mitel and Shortel and claim that Shoretel's is better?

Shoretel has gone out of their way to hire Mitel employees and recruit Mitel dealers. If you go out of your way to anger another company, don't be surprised if their is a price to be paid.

ipcom said...

Posted by: Mike Harrigan

Sounds more like "Industry Insider" is actually "Mitel Insider". It's the first blog or comment (and I really mean *the first*) I've seen that attempts to support Mitel's action. Oh, and I'm not a ShoreTel employee although I use a ShoreTel system daily and love it.

ipcom said...

Posted by: Jason Rogert

Hmmmm....put aside all of the comments about who has the better technology. If ShoreTel is using "stolen" property as the foundation of their technology they should pay for it.

ipcom said...

Posted by: Anders Couse

It will be interesting to see this shake out. I put our RFP on hold since Mitel and ShoreTel were both on our short list. I found the products to be very similar with a slight edge to ShoreTel for ease of managment and a significant edge to Mitel for strength of application.

That being said, if ShoreTel loses this suit, what does it mean? I am not going to buy from a company whose future is so cloudy.

Does anyone know what would happen if ShoreTel loses this suit?

If forced to make a decision today, personally I would shy away from ShoreTel.

ipcom said...

Posted by: J D

Have there been any updates in regards to the lawsuit?