Business Victory Against Lemelson Patent Claims
NAW Legal Advisory
Every wholesaler-distributor who has been named in a patent infringement lawsuit by the Lemelson Foundation, or received a cease-and-desist letter from Lemelson seeking a monetary settlement, won a victory recently in the Federal appeals court. (Symbol Technologies, Inc. v. Lemelson Foundation, No. 00-1583). Lemelson has numerous suits pending against hundreds of companies -- including many wholesaler-distributors -- claiming their use of bar-code scanning devices and other "machine vision" equipment infringe on Lemelson patents. Each use of these devices is claimed to be a separate infringement for which compensation is sought. Over the last decade, Lemelson has settled infringement disputes with hundreds of major corporations collecting over $1 billion in royalties.
This barrage of litigation prompted the manufacturers of bar-code equipment and other similar devices to come to the aid of their customer base by filing suit against Lemelson seeking to have his patents declared void and unenforceable.
In a 2-1 ruling, the appeals court for the Federal Circuit in the Symbol case ruled that the Lemelson patents may be void and unenforceable due to Lemelson's alleged unreasonable and unexplained delay in advancing his patent applications in the U.S. Patent and Trademark Office. The Lemelson patents were issued between 1978 and 1994, and they originated from two applications filed in 1954 and 1956. Through procedural maneuvering, Lemelson kept the contents of his 1950's application secret, or submerged, in the Patent Office while bar-code scanning technology advanced in good faith, unaware of potential future patent problems. In 1994 Congress outlawed this practice on a prospective basis.
Lemelson has filed a petition for rehearing before the full appeals court. Absent a rehearing, the case will go back to the Federal district court in Nevada where the plaintiffs will present evidence in support of their position. If the Lemelson patents are ruled unenforceable based on this defense, this decision would basically terminate all the other cases brought and claims made by Lemelson in favor of the defendants. However, a final ruling on this issue is likely years away.
The appeals court decision may be viewed at laws.findlaw.com/fed/001583.html
