Wednesday, 20 August 2008

Twists and Turns Of Star/AeroMechanical Lawsuit

AeroMechanical Services Ltd., (TSX:V-AMA)
Basic Shares: 81 million
Fully Diluted: 93 million


"I can't explain myself, I'm afraid, Sir, because I'm not myself you see."

Ah, how this quote from the classic tale of Alice In Wonderland so aptly mirrors the confused state many investors found themselves in while trying to make sense of the on-again, off-again, patent infringement lawsuit Star Navigation filed against AeroMechancial (AMA) in northern California.

Most of the confusion arising from the decision released Aug. 19th came when the argument dramatically shifted from one technical point to another.

What investors were expecting was a clean decision on whether Star would be able to carry on its lawsuit by dragging its fired, former senior executive kicking and screaming into its lawsuit as an "involuntary plaintiff."

Instead, the court said while Star couldn't use its former executive, Hilary Vieira, as an involuntary plaintiff, it could name Mr. Vieira as a defendant in its patent infringement lawsuit against AMA.

So the Alice-In-Wonderland question many investors were left with was how can Star carry on with a patent infringement lawsuit against the man who owns the patent on which its business is based?

Unfortunately, no answers were provided to that critical question.

And none will likely emerge, until after Sept. 5th, the deadline the court imposed for patent infringement lawsuit to be revived by adding Mr. Vieira as a defendant alongside AMA.

But this much was clear; the court has twice dismissed the lawsuit against AMA on procedural issues.

Another question hanging on the lips of many was could there be a third AMA motion to dismiss after Star proceeds - as it has stated it will - to take Mr. Vieira out of the plaintiff slot and stick him in the defendant category in a thrice-filed lawsuit?

AMA's firm belief is it does not infringe on Star's patent and it is merely trying to reduce legal fees by having Star's frivolous suit dismissed rather than fight an expensive legal battle to prove its innocence.

Time will tell what the next turn in this Alice In Wonderland tale will be but in the meantime, to read the full AMA news release on the recent court decision please click here.

To read the full court decision on AMA's Website, please click here.