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Small Computer Firm Sues Hewlett-Packard for $35 Million

January 21, 1986

MILPITAS, Calif. (AP) _ A computer maintenance firm has filed a $35 million lawsuit against Hewlett-Packard Co., accusing the computer-industry giant of attempting to drive it out of business.

Datagate Inc. charged Hewlett-Packard’s sales and engineering personnel with falsely telling computer owners that service companies such as Datagate would soon be out of business.

In the suit, filed earlier this month in U.S. District Court, Datagate also claimed Hewlett-Packard officials told potential customers Datagate and other such companies often were incapable of repairing Hewlett-Packard computers and would no longer be receiving spare parts from Hewlett-Packard.

Datagate asked the court to halt the alleged practices and to order Hewlett-Packard to pay at least $35 million in actual and punitive damages.

Hewlett-Packard already has 90 percent of the market for servicing its own hardware ″and it would appear from their behavior they want even more than 90 percent,″ said Doug Willbanks, vice president of marketing at Datagate.

The suit charges Hewlett-Packard with unfair competition, defamation, disparagement and attempted monopolization.

Hewlett-Packard spokesman Gene Endicott declined to comment on the case, saying officials were reviewing the suit.

The privately held Datagate, which has specialized in the service and repair of Hewlett-Packard computers since its founding in 1978, has about 105 employees and annual sales of less than $10 million. Hewlett-Packard, the world’s largest diversified electronic instruments company, employs about 84,000 and had sales of $6.5 billion last year.

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