Global Crossing Sues Tyco Over Rival Fiber Network
Global Crossing Ltd. is seeking damages of more than $1 billion in a lawsuit filed Monday against a unit of Tyco International Ltd., a longtime contractor that Global Crossing says stole trade secrets and used the information to create a rival network and steal away a key customer.
The lawsuit, filed in U.S. District Court in New York, also accuses Tyco’s Submarine Systems Ltd. subsidiary of defamation and of breaching a $700-million sole-source construction contract to build Global Crossing’s planned fiber network serving South America.
Officials at Tyco International and Tyco Submarine Systems could not be reached for comment Monday afternoon.
Bermuda-based Global Crossing, which has executive offices in Beverly Hills, is building a worldwide communications network that includes fiber-optics installed both undersea and across countries. New Jersey-based Tyco Submarine, formerly AT&T; Submarine Systems, has received construction contracts worth about $3 billion from Global Crossing.
The lawsuit focuses on a Global Crossing project called South American Crossing, an 11,000-mile-plus network that will link major cities in Brazil, Argentina, Chile, Peru, Colombia and Panama when it is completed.
Just days after signing a construction contract for South American Crossing, Tyco Submarine and its parent company announced plans for a joint venture that will directly compete with Global Crossing’s project in South America, the lawsuit alleges.
In addition, Tyco’s joint venture includes a partnership with Telefonica, Spain’s largest phone company and a firm that Tyco knew to be in negotiations to buy capacity on the South American Crossing network, according to Global Crossing’s complaint.
Tyco’s new joint venture includes a terrestrial fiber segment that travels through the Andes mountains instead of under water around Cape Horn, a strategy developed and engineered by Global Crossing for its South American Crossing project, the company said in the complaint.
Global Crossing said Tyco’s actions are in violation of agreements between the companies that prohibit disclosure of confidential route maps, business and marketing plans and other data to third parties and that require Tyco to immediately inform Global Crossing of its involvement in any competing project.
In addition, Global Crossing claims that its competitive position in South America has been damaged because Tyco convinced Global Crossing that it could not complete the first phase of its network until September 2000, but later announced that the first leg of the competing network would be finished in August.
