Already under investigation by the Department of Justice and Securities and Exchange Commission in connection with the Foreign Corrupt Practices Act (FCPA), Panasonic is being sued by the in-flight entertainment software and services company for wide spread anticompetitive conduct, including monopolization in violation of the Sherman Act, tortious interference with business relationships, corporate espionage, commercial bribery, defamation and product sabotage.
HARRISON, NY – March 1, 2017 – CoKinetic Systems Corporation, a globally recognized leader in the in-flight entertainment (IFE) market, announced today that it has filed suit against Panasonic Avionics Corporation, seeking damages in excess of $100 million. CoKinetic alleges in its complaint, which was filed earlier today in the United States District Court for the Southern District of New York, that Panasonic has willfully violated open source licensing requirements, breached contractual obligations to CoKinetic, abused FAA regulatory processes, conducted corporate espionage, defamed CoKinetic and sabotaged its products, degraded airline IFE systems to interfere with customer relationships, purportedly paid commercial bribes, and otherwise employed unlawful means to monopolize the market for in-flight entertainment software and media services used by airlines to offer airline passengers customized entertainment amenities, such as movies, games, food ordering, shopping and other interactive services on Panasonic’s IFE hardware systems.
“Panasonic Avionics Corporation has long been the world’s leading supplier of in-flight entertainment hardware systems. Unfortunately, Panasonic has also carried out a relentless campaign to maintain monopoly control over the software and media services used by airlines around the world to power their Panasonic IFE systems. CoKinetic has spent the past eleven years fighting against all odds on behalf of its airline customers to work cooperatively with Panasonic to open up their IFE hardware platform, especially given its roots in open-source technologies, to healthy competition, but enough is enough. Panasonic’s anticompetitive conduct has all but eliminated competition for software and services in this market, crushing innovation while corrupting the industry and driving up costs for airlines, which inevitably hurts the consumer,” says Todd A. Higgins, Esq., managing partner of Crosby & Higgins LLP, and lead attorney for CoKinetic Systems.
On February 2, 2017, Panasonic Corporation, which is the Japanese parent company of Panasonic Avionics Corporation, publically announced that the Department of Justice and the Securities Exchange Commission are currently investigating Panasonic in connection with the FCPA and other securities related laws. On the same day, Panasonic Corporation of North America, which oversees the activities of Panasonic Avionics Corporation, announced without notice or explanation, that the Chief Executive Officer and the Chief Financial Officer of Panasonic Avionics Corporation had left the company, effective immediately. On February 28, 2017, Panasonic Corporation of North America also announced its CEO’s retirement.
In its lawsuit, CoKinetic alleges an array of anticompetitive acts engineered by Panasonic to force CoKinetic from the market, including:
- Deliberately degrading and damaging IFE hardware systems owned by Panasonic’s own airline customers, including Emirates Airlines, Delta Air Lines, Virgin America, United Airlines and others, in order to create the appearance that only Panasonic is able to provide reliable software and media services on Panasonic IFE hardware;
- Entering into an exclusive license agreement to use CoKinetic’s “AirPlay” technology after CoKinetic successfully entered the market with Virgin America; only to engage in a concerted campaign to disparage and sabotage the performance of CoKinetic’s software products;
- Secretly wiring a listening device to spy on CoKinetic and eavesdropping on the company’s business meetings, as well as private discussions with airline employees;
- Allegedly making illicit payments and otherwise providing expensive gifts, excursions and entertainment to influence airline employees, interfere with relationships between the airline and CoKinetic and induce airlines to discontinue using CoKinetic’s software;
- Deliberately blocking competitors from having the ability to develop software for Panasonic’s IFE Hardware by refusing to distribute the source code for its open-source Linux based operating system, which controls the basic functions of Panasonic IFE hardware systems, in willful violation of Version 2 of the GNU General Public License, exposing Panasonic as a willful infringer of the copyrights of thousands of software developers that have contributed to Linux.
“As a primary source of innovation in IFE software, CoKinetic has worked every day on behalf of airlines and their passengers to open the in-flight entertainment market to free and fair competition. This lawsuit is an unfortunate but necessary step towards accomplishing that goal,” says Todd A. Higgins, Esq. of Crosby & Higgins LLP. “Without competition, airlines pay too much, wait too long, and struggle to innovate. None of that is necessary but it’s never going to change without opening up the IFE market.”
For more information, visit www.cokinetic.com.
CoKinetic is globally recognized as a major source of innovation in in-flight entertainment (IFE) software and services. The company’s AirPlay IFE platform has been powering award-winning IFE systems since 2007. CoKinetic is based in Harrison, NY, with offices in Lake Forest, CA and Bengaluru, India. For more information, visit www.cokinetic.com.
# # #
Cristyne Nicholas, Cristyne@nicholaslence.com / Tel: 212.938.0002
Shin-Jung Hong, ShinJung@nicholaslence.com / Tel: 212.938.0005
# # #
A complete copy of the filed complaint is available below: