GlobeNewswire Inc | Jun 24, 2021 05:07PM EDT

June 24, 2021

CALGARY, Alberta, June 24, 2021 (GLOBE NEWSWIRE) -- DIRTT Environmental Solutions Ltd. (DIRTT) (TSX: DRT, NASDAQ: DRTT) an interior construction company that uses proprietary software to design, manufacture and install fully customizable environments, announces that it has expanded its litigation against Falkbuilt (a company started by two of DIRTTs founders Mogens Smed and Barrie Loberg), and continues to aggressively pursue Smed, Loberg and Falkbuilt via four separate lawsuits across North America, as outlined below.

Kevin OMeara, chief executive officer, stated, Our primary focus is the successful execution of our strategic plan and capturing the benefits of improving construction market conditions, however we also remain steadfast in our commitment to vigorously defend the value of our business, our brand and the interests of our employees, clients, distribution partners, suppliers and shareholders. We are disappointed that the actions of Falkbuilt and its founders necessitated any of this litigation, but we are determined to pursue these actions to the fullest extent of the law.

DIRTT Files a New Lawsuit in Texas

Today, DIRTTs U.S. operating subsidiary filed a federal lawsuit in the U.S. District Court for the Northern District of Texas (Case No: 3:21-CV-1483) against Falkbuilt (the Texas Litigation). The lawsuit alleges that Falkbuilt has unlawfully used DIRTTs confidential information in the United States and intentionally caused confusion in the United States in an attempt to steal customers, opportunities, and business intelligence, with the aim of establishing a competing business in the United States market. Among other things, the lawsuit alleges violations of the U.S. Lanham Act, the Texas Uniform Trade Secrets Act, the Federal Defense of Trade Secrets Act, the Pennsylvania Uniform Trade Secrets Act, the Colorado Consumer Protection Act, and the Ohio Deceptive Practices Acts. In addition, the lawsuit seeks injunctive relief that was previously granted in Utah, which is also being sought in Canada.

DIRTT Continues to Pursue the Utah Litigation

In addition to the Texas Litigation, DIRTT continues to pursue its trade secret misappropriation claims against Falk Mountain States, an entity purportedly operating as Falkbuilts Salt Lake City Branch, and several individuals affiliated with the Branch in the U.S. District Court for the District of Utah (Case No: 1:19:CV-00144) (the Utah Litigation). DIRTT is currently reviewing discovery and intends to conduct depositions in the near future. Falkbuilt and Smed were previously parties to the Utah Litigation, but the judge in the Utah Litigation recently ruled that it would be more convenient for certain aspects of the case to be heard in Canada. DIRTT disagrees with this ruling and intends to appeal the decision.

DIRTT Seeks Order Compelling Smed and Loberg to Attend Depositions; Increases Claim to $25 million

In Canada, DIRTT continues to aggressively pursue its claims against Falkbuilt, Smed, Loberg and several other former DIRTT employees in a lawsuit filed on May 9, 2019 in the Court of Queens Bench of Alberta alleging, among other things, breaches of restrictive covenants; fiduciary duties; and duties of loyalty, fidelity and confidentiality; conspiracy; and the misappropriation of DIRTTs confidential information (the Canadian Litigation).

DIRTT recently filed an application seeking a court order compelling numerous defendants, including Smed and Loberg, and others, to attend depositions. In addition, DIRTT is seeking to have the preliminary injunction previously granted in the Utah Litigation entered in Alberta, and it is seeking leave to file an amended claim increasing its damages to Cdn$25 million, which it believes is reflective of Falkbuilts revenues to date.

U.S. Patent Case Continues

In addition to the three lawsuits described above, DIRTT has also filed an action for federal patent infringement in the U.S. District Court for the Northern District of Illinois (Case No: 1:20-cv-04637) against Falkbuilt. The patent lawsuit alleges that Falkbuilts EchoDome software infringes certain of DIRTTs patents relating to its proprietary ICE software (the U.S. Patent Case), one of whose inventors was Barrie Loberg, a founder of Falkbuilt and a defendant in the Canadian Litigation.

About DIRTT

DIRTT is a building process powered by technology. DIRTT uses proprietary 3D software to help design, manufacture, and install fully customized interior environments. This same software provides clients with certainty around cost, schedule, and the outcome. With modular components and a streamlined construction process, complete interior spaces are constructed faster, cleaner, and more sustainably. The Company works with distribution partners throughout North America. DIRTT trades on Nasdaq under the symbol DRTT and on the Toronto Stock Exchange under the symbol DRT.

For more information, please contact:Kim MacEachernInvestor Relations, DIRTTKmaceachern@dirtt.com403.618.4539