Olivetti faces legal showdown with rival

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Olivetti, the computer giant, faces legal action from arch-rival Norsk Data over allegations of defamation and infringement of copyright.

The row is part of a long-running battle between the two companies' UK operations for multi-million-pound computer maintenance contracts.

Central to the affair is the role played by staff who switched jobs between the two firms. Norsk Data says it harboured suspicions for two years that Olivetti's subsidiary, Office Automation Services, was in possession of confidential software and manuals.

But it was only when the High Court granted Norsk Data a draconian search and seize warrant - an Anton Piller order - last month that it was able to get confirmation.

An Anton Piller gives private individuals and companies the power to raid premises and homes at a moment's notice. Armed with the warrant, a team from Norsk Data's solicitors, Baker & McKenzie, turned up unexpectedly one Monday morning at OAS's Guildford offices, along with an independent solicitor to oversee the search. They found software and manuals in the building and also in the boot of a car belonging to John Dudman, a former Norsk Data manager, now with OAS. Ironically, Norsk Data was itself tipped off by a salesman working at OAS, who has since taken a job at Norsk Data.

An Olivetti spokeswoman said this weekend that it would fight an injunction banning OAS from using the Wordplex diagnostic software, on the grounds that Norsk Data was abusing its market position.

The two companies have been bitter rivals for some time, with Olivetti claiming it has taken business away from Norsk Data. When the shares of Norsk Data's Norwegian parent were suspended, pending a refinancing earlier this year, OAS circulated letters to its rival's clients. These told them to contact OAS if they were worried about their long-term maintenance contracts. Norsk claimed this questioned the viability of its UK operation and issued a writ against OAS and Joseph Scott, the managing director, seeking damages. 'It was a misleading and unfair statement, and was intended to confuse customers,' claimed Norsk's solicitor, Michael Hart. Mr Scott has since left OAS. An Olivetti spokeswoman said it would fight the libel action.

OAS is also due to appear at Reading Crown Court in July on charges under the Copyright Design and Patent Act. The case is being brought by Berkshire County Council Trading Standards.