The legal wrangling between Zoom and RingCentral has continued, with the latest court document laying out the position of each party.
The battle centres on the RingCentral Meetings platform which was introduced seven years ago and is powered by Zoom technology.
RingCentral has since released its Video offering which it intends to push ahead of the Zoom-powered offering. Concurrently, Zoom has moved to terminate the partnership between the pair.
The lawsuit contains three key disputes:
- Whether RingCentral is still allowed to sell the Zoom-powered RingCentral Meetings Product
- How long Zoom is required to provide support for RingCentral Meetings customers
- Whether the restrictive covenants blocking Zoom from converting Meetings customers to its own platform are valid
The primary issue in the dispute is whether RingCentral is allowed to sell the Zoom-backed RingCentral Meetings (RCM) product during the sunset period of the agreement. RingCentral claims it is allowed to; Zoom says it isn’t.
Both sides of the argument are built on the wording of the agreement. Zoom claims that agreement states RingCentral cannot sell RCM during the sunset period; RingCentral says that the sunset period falls within the time boundaries of the agreement and therefore it can continue selling RCM and it is Zoom’s responsibility to support the product.
In January this year Zoom asked RingCentral to stop selling RCM and, when RingCentral refused, took technological steps to block new customers from activating the service.
An extension of this is that, by selling and RCM and stating that it is powered by Zoom, Zoom claims that RingCentral is infringing its copyright.
However, RingCentral claims that it is allowed to continue selling the product during this time under the terms of the agreement., although it says it is no longer selling the product because of Zoom’s “misconduct”.
A second strand of the dispute is support for customers of RCM– for which the two companies are both interpreting the agreement in different ways.
Zoom claims that RingCentral should not have sold contracts for RCM that ran beyond the duration of the pair’s agreement, arguing that it should not be hampered with the support of contracts that could, in theory, run for 10 years after the agreement’s termination.
It claims that providing support for these customers would create “significant operational burdens” for its “limited engineering resources”.
Zoom says that, under the terms of the agreement, RingCentral is required to transition RCM customers to another platform once the agreement has ended.
In a statement sent to UC Today, Zoom’s outside counsel – Doug Lumish of Latham & Watkins – said:
“For over seven years, RingCentral has been using Zoom’s popular and reliable video communications technology to power its own RingCentral Meetings. With the partnership coming to an end, RingCentral is publicly touting its own technology yet inexplicably asking Zoom to continue supporting RingCentral Meetings well beyond the contract’s end date in order to help them fulfil promises they made to customers without Zoom’s knowledge or consent. Zoom will continue to support legacy RingCentral Meeting customers only until the end of the contract sunset period. If RingCentral truly believes in their own technology, they should use it.”
RingCentral disagrees, citing a passage in the agreement which it claims states that “termination of this Agreement will not terminate or affect any Customer Agreements entered into prior to termination of this Agreement for the term of each such customer agreement.”
It claims that Zoom is trying to wriggle out of this statement by “distorting” other more general statements in the agreement.
For its part, Zoom states that any blame for the disruption of service to RCM customers lies at the feet of RingCentral itself because RingCentral entered into the customer agreement.
RingCentral said in a statement sent to UC Today:
“Starting seven years ago, RingCentral was the first company to partner and bring Zoom’s video solution to market. We now have our own video solution, RingCentral Video – which is the video solution for our new customers and they have been thrilled with it. However, Zoom has a clear contractual obligation to support RingCentral’s customers through the life of the customer contracts. We believe in giving customers the time they need to upgrade to RingCentral Video, and we believe Zoom should honour its contractual obligations. In short, we honour our customer and partner commitments – clearly, this is not the Zoom way.”
Non-Compete Clauses
Another component of the lawsuit focuses on whether Zoom is allowed to approach RCM customers and try to coax them onto its own platform.
Zoom claims that the restrictions in the pair’s agreement blocking it from doing so are too broad and invalid under Californian state law – particularly if Zoom has acquired the contact details of potential customers independently of the RCM agreement.
In response, RingCentral claims that Zoom has used scare tactics to try and tempt RCM customers over to its own platform by informing them that support for RCM would end imminently, which RingCentral says breaches the confidentiality of the pair’s agreement.
Both Zoom and RingCentral are seeking compensation and the covering of legal fees from the other.
More to follow…
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