Cygnal Technologies Corp. won a court fight last month that will prohibit a rival company started by a former employee from approaching its customers.An Ontario Superior Court granted an injunction restraining unfair competition from Activo Inc., a provider of voice, video and data network infrastructure. Activo was founded in March by James Taylor, a former senior executive at Markham, Ont.-based Cygnal. Taylor joined the company when it acquired his previous firm, Integrated Cable Systems Inc., five years ago.
“By keeping in his possession documents that contained sensitive information about Cygnal and its customers, and by competing with the company starting only five months after resigning from its board, Mr. Taylor competed in an unfair manner,” the court decision said. “As a director and high-level employee of Cygnal, Mr. Taylor owed fiduciary obligations to the company.”
Cygnal boasts a number of high-profile customers, including Hydro One Telecom, and the Great Canadian Gaming Corp., which signed a deal in June to buy voice over IP applications from Cygnal.
Activo is playing in a similar space, offering a number of products to help large organizations move to IP-based private branch exchange (PBX), unified messaging and virus protection.
The court injunction won’t keep Activo away for long, however. It expires at the end of this month, which will mark one year since Taylor left Cygnal.
“We’re open for business and we will be for a long time,” Taylor said. “(The injunction) bars me from talking to their customers, but they don’t have every customer.”
Cygnal had been seeking damages in addition to the injunction, according to chief financial officer Paul Horsley. The company had also hoped for an injunction longer than 12 months, but Cygnal has accepted the judge’s decision, he said.
Taylor said his stormy relationship with Cygnal does not necessarily preclude him from courting a buyer for Activo some day.
“Times are improving, the telephony market’s changing quite a bit with IP. The next few years will be good ones,” he said. “I learned a lot in the last go-around. Anything is possible.