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X10 of Seattle ordered to pay Internet entrepreneurs $4.3 million

The Associated Press

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But they wonder if they'll recover the innocence they say they lost in the rough-and-tumble world of big business.

Two weeks ago a Superior Court jury in Santa Ana ordered X-10 Wireless Technology of Seattle to pay the Vanderhooks $4.3 million in damages. Deliberations on how much to award in punitive damages begin Wednesday.

X10 attorney Sean P. O'Connor would not comment on the damage award or possibility of an appeal.

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

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

They created Advertisement Banners.com out of their parents' Yorba Linda home four years ago, using "pop-under" technology in which product pitches are placed beneath Web sites and appear after a browser is closed, an alternative to "pop-up" ads that block the view of Web pages.

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

"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 brothers.

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

The brothers decided to file their lawsuit not for the money but because "a wrong needed to be righted," Tim Vanderhook said.

As they pursued the case over the past two years, the sons of a former Los Angeles police officer said they struggled to keep their company afloat. They employ seven other people.

"All of a sudden, it stops being a game when it's real money and real dollar figures and real employees depending on us for their jobs," said his brother Russell.

Copyright © 2003 The Seattle Times Company