The Tel Aviv District Court has ordered Check Point (Nasdaq: CHKP) to pay NIS 13 million to information security company SofaWare Technologies for breach of contract. Check Point owns 60% of Sofaware.
The court ruling represents partial acceptance of a claim for $5 million filed by one of Sofaware's founders, Itai Bogner on the company's behalf after the company failed to sue.
The case related to agreements between the two companies for Check Point to distribute SofaWare products and to incorporate SofaWare technology in its own products. The suit alleged that on various pretexts Check Point paid SofaWare less in royalties than was due under the agreements.
The judge upheld the claim over the product distribution agreement, but dismissed the claim over the technology use agreement. In the course of her judgment, the judge criticized the testimony of Check Point CEO Gil Shwed and his selective memory. "His response only points to a unilateral decision by Check Point to turn the products into its own products in order not to pay SofaWare under the product distribution agreement," she found.
Check Point will also pay SofaWare NIS 720,000 costs and NIS 100,000 to the plaintiff.
Published by Globes [online], Israel business news - www.globes.co.il - on February 14, 2008
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