Kingstone remembered Rollhaus's offer, and in December 1987 he contacted him. The subject was ADTI. "The company's technology is excellent, the management is not," he wrote to Quixote, specifically pointing out the "unjustifiable salaries" of the company's managers -- a curious comment given his compensation demand of Sedlmayr. Perhaps, though, this could be a worthy speculative investment for Quixote. In early 1988 Quixote hired Kingstone, at $6,000 per month, to look deeper into ADTI.
Kingstone's research turned up a patent belonging to Steve Sedlmayr. The patent cited other patents as so-called prior art. Two of those belonged to William E. Glenn. The file on Sedlmayr's patent revealed that the patent office initially contended that Sedlmayr's invention was an insufficient advance over Glenn's.
In February Kingstone and Jim DeVries, a vice-president at Quixote, went to Florida to visit Glenn and learn more about his work. Glenn was surprised to learn that Sedlmayr had gone into business. Kingstone grew suspicious. He recalls being told, " 'Brett, people don't usually lie to you just once. There's a pattern of repeated behavior.' "
In late March Quixote declined to invest in ADTI. "My conclusion at the time was that the light source was not bright enough," says DeVries. On March 30, 1988, Quixote terminated its formal relationship with Kingstone. Kingstone responded, according to his notes of a phone call, "I will continue to pursue this project on my own."
In March, back in Colorado, Kingstone invited Sedlmayr out to a nearby café. Over iced tea, Sedlmayr claims, Kingstone told him Quixote was prepared to put $5 million into the company except that it had serious problems with the management. Kingstone proposed they get rid of ADTI's "deadwood"; the two of them would in effect start a new company. Sedlmayr protested that he had a fiduciary responsibility to shareholders and a moral obligation to employees. Recalls Sedlmayr, "He then said, 'I wish you the best of luck, but I don't think you're going to make it.' " He assumed that was the last he would see of Brett Kingstone.
Some two weeks earlier, on March 18, Kingstone had secretly sent a sketch to William Webb, Quixote's lawyer in Chicago. Entitled ADT Method of Making Fiber Screen, the sketch had been made by Kingstone following a visit to ADTI, where he had signed a visitor's pass agreeing not to disclose to outsiders any ADTI trade secrets. Kingstone asked if the process might infringe on Glenn's patents. On April 11 Webb wrote back that it did.
Kingstone returned to Florida in April. Glenn was happy to see an entrepreneur so willing to breathe life back into his ideas. In Glenn, Kingstone found a man "who treated me like a son." Kingstone believed Glenn, like his father, had been shortchanged by life. "He was unhappy that ADTI had raped his technology."
Glenn's two patents relating to the making of fiber-optic screens had lain dormant for almost a decade. Now, Kingstone sought to license them. The patents, however, were not owned by Glenn but by his employer, the New York Institute of Technology. NYIT, in Old Westbury, on Long Island, relies on licensing income from discoveries made by its faculty.
In early May, NYIT chancellor Alexander Schure received a signed letter of intent from Glenn seeking an exclusive licensing of his patents to FiberView, a company Kingstone was in the process of forming. In addition, Glenn wrote enthusiastically of Kingstone's abilities. Schure thought this odd. "Usually our patent counsel has a lot of input [on license negotiations]," he recalls. "In this case, all of that was done by Dr. Glenn." Stranger still, Schure continues, "Dr. Glenn tends to be low key; he's a taciturn man. But this was an unusually enthusiastic portrayal of Kingstone."
But Glenn's endorsement carried weight at NYIT, his employer since 1975. The institute had set him up with his own lab in Florida. He earned a salary substantially more than $100,000, in addition to a healthy cut of the royalties his patents generated. The license agreement stipulated an initial $15,000 payment to FiberView. That was paltry. But this was a huge technology; the payoff lay down the road, Glenn and Kingstone persuaded Schure. The agreement was signed, effective the first week of May. Schure himself would later invest $50,000 in FiberView, assigning the shares to NYIT. "I thought," recalls Schure, "here was a wonderful chance to exploit this technology -- for Glenn, for the institute. Maybe it could be a big bonanza."
By May 1988 morale at ADTI had hit bottom. Those not already laid off were not drawing salaries. Brett Kingstone, meanwhile, was forming FiberView -- and contacting ADTI employees. One of them was Douglas Gordon, ADTI's director of international affairs.
In early May Gordon approached two ADTI engineers and a technician and asked them if they wanted to work for FiberView. They declined. Gordon also announced to management that he believed an industrial spy had recently visited the company. He volunteered to review all visitor passes to ferret out the spy. A number of employees recall the odd sight of Gordon, a high-level employee, doggedly moving through the building inquiring if all passes had been recovered.
"He seemed pretty intent on getting to these," says Rebecca McCall, ADTI's vice-president of administration. "This was not an off-the-wall request. It was very deliberate. He kept asking me where any other passes might be filed."
Brett Kingstone had visited ADTI about half a dozen times. Each time he had signed a visitor pass agreeing not to disclose or misappropriate any confidential information developed by ADTI. After Doug Gordon left ADTI, a stack of visitors' passes was found in his office bookcase. A subsequent search revealed that all of those signed by Kingstone were gone.
All, that is, except one that had been missed.
Brett Kingstone incorporated FiberView for the purpose of making fiber-optic display screens on May 25, 1988. His business plan listed Douglas Gordon among the founding management. But Gordon was still on the payroll at ADTI, whose employ he would not leave until June 15.
