Giant gets action on customised PCs

By PETER GRIFFIN

A legal squabble between Hewlett Packard and reseller Gamma Computers has been settled out of court.

Gamma's director, Abbas Shahroodi, said the Auckland company did not admit liability but had agreed to conditions on its resale of Hewlett Packard products.

It also paid $2000 towards the PC manufacturer's legal fees.

"We're allowed to sell Pavilions assembled by Hewlett Packard and their other products as long as we source them through Hewlett Packard," said Mr Shahroodi.

Gamma drew the wrath of HP when it bought parallel-imported HP Pavilion computers that entered the country minus their hard drives, processors and memory.

Gamma was giving customers the option of buying components separately and paying an overall price the company claimed was lower than that of assembled Pavilions sold by retailers such as Noel Leeming and Harvey Norman.

But HP said the end product constituted a Pavilion in name only and that Gamma's actions violated the HP trademark.

Mr Shahroodi said Gamma did nothing wrong, as the parts it was offering were genuine and came from HP's official suppliers.

"We were itemising every component in the system so it wasn't a matter of misleading anybody. We have to make sure not to step on their toes from now on."

Parallel importing of PCs is legal but uncommon in New Zealand, as importers have to find a source of computer components outside tightly controlled supply lines.

In Gamma's case, the Pavilion "boxes" came from PB Technologies, a local company, which in turn bought them from California-based Excess International, a clearing house for surplus computer parts.

Gamma still customises systems for customers buying Compaq and IBM PCs.

Those manufacturers had not complained about the practice, said Mr Shahroodi.

"The Pavilion deal related to only a handful of PCs. We sell a few thousand computers a year."

Hewlett Packard yesterday said it would begin a build-to-order service for business customers.

But the service applies only to Hewlett Packard's e-pc and Vectra product lines, not the Pavilion range, which is predominantly sold through major retailers.

The manufacturer yesterday received Commerce Commission clearance on a local level for its planned merger with rival Compaq.

HP shareholders will vote on the merger in the US next month.