HP sues Intelligent Decisions

Hewlett-Packard Co., Palo Alto, Calif., has filed a lawsuit against government reseller Intelligent Decisions Inc., Chantilly, Va., claiming the company sold government-discounted hardware to nongovernment buyers, HP announced March 15.

David Scher, corporate counsel for Intelligent Decisions, said the company is in the process of resolving the dispute with HP. Scher would not comment on the allegations, citing pending litigation, but said "the suit in no way impacts our ability to serve our customers."

The suit, filed in federal district court in Alexandria, Va., alleges that Intelligent Decisions had purchased $22 million worth of hardware from HP for what it said were government clients. HP has a number of government contracts that require rebates and discounts.

HP alleges that only $2.1 million of goods were actually resold to government clients, the rest being sold to brokers and resellers, which violates the reseller agreement.

HP spokeswoman Elizabeth Gillan said the suit against Intelligent Decisions is the first the company has initiated in its campaign to reduce the sale of its products in the gray market, or the market for reselling a vendor's products without its permission.

Gillan said HP approached Intelligent Decisions about reselling before the suit was brought, but the matter was not resolved.

Compaq Computer Corp., which has since merged with HP, filed a similar suit against Intelligent Decisions Chief Executive Officer Harry Martin, then running Millennium Technology Group, in August 2001, according to HP. That lawsuit resulted in a payment to Compaq.