Brothers who sued Internet company win $4.3 million damages; could get more in punitive phase

Monday, October 20th 2003, 12:00 am
By: News On 6

YORBA LINDA, Calif. (AP) _ Three young brothers were awarded $4.3 million _ and stand to win more in punitive damages _ after accusing X10 Wireless Technology of trying to bully them out of business.

But the brothers, who founded their company when the youngest of them was still in his teens, say the case is about the cutthroat nature of Internet business, not about money.

``This lawsuit was about fairness, not about making us rich,'' said Chris Vanderhook, who created an Internet advertising business with his brothers in 1999.

Two weeks ago, a Superior Court jury in Santa Ana ordered X10, a Seattle-based technology company, to pay $4.3 million in compensatory damages to the Vanderhooks. Deliberations on punitive damages start Wednesday.

The brothers _ Russell, 26; Chris, 25; and Tim, 22 _ claimed that X10 failed to pay $564,000 in commissions and stole their proprietary technology and business model.

X10 attorney Sean P. O'Connor declined to comment or say whether the company planned to appeal.

``It would be inappropriate for either counsel to discuss this matter until the jury has completed its deliberations,'' he said.

The Vanderhooks created Advertisement from their parents' Yorba Linda home. It was one of the few companies to use ``pop-under'' technology that allows advertisers to place their product pitches underneath computer Web sites so that a person sees the ads after they close their browser rather than being confronted by the more annoying ``pop-up'' announcements while they're looking at something else.

One of their first big clients was X10, whose security-camera ads soon began appearing all over the Internet.

``When we found out they weren't paying that bill, we were beyond distraught,'' recalled Chris Vanderhook.

``These were young guys who had a dream to start a successful company, but X10 looked at their youth and thought they could wipe them out,'' said Michael Fitzgerald, a lawyer for the Vanderhooks.