Setback for Lemelson
Until now, inventor Jerome
H. Lemelson (actually, the Lemelson Foundation, since he died in 1997) had a
lock on patents to automatic identification technology. Lemelson signed up
hundreds of bar code and machine vision users to contracts for licenses to use
his patents. Big users like automotive figured that the cost of a license
— sometimes less than a penny per $100 in retail sales, depending on the
industry — was less than the cost of contesting and certainly less than
the penalty for patent infringement. So, as Lemelson continues to expand his
(the Foundation’s) market,
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any company that uses bar code equipment is
sure to be pressured into signing up.
Are the patents valid?
Objectors, including seven manufacturers of Auto ID equipment, point to the way
the patents were issued. Lemelson applied for most of the patents in 1960 and
kept them alive for about 30 years by resubmitting. (At the time, a patent
extended 17 years from the date it was issued, not from the date of
application, as it does today.) What Lemelson contended was that the Patent
Office requested more details, he provided more details, they kept rejecting,
he kept reapplying, etc.
But Arthur H. Stroyd, the partner of Reed Smith LLP, and
general counsel of the Material Handling Industry, explains, “Essentially
the effective date of the patent used to go back to the date it was applied
for, but the technology and contents of the application were secret. Each time
Lemelson reapplied for a patent, he would be able to send up what could be described
as a submarine periscope to look at what was going on in the bar code industry.
And then he could tweak his patent application, or his reapplication, to
reflect some of those developments that he had spied through the
periscope.”
By the time the patent was
finally approved, Lemelson surfaced with a document that included the latest
developments in Auto ID technology. “Much to the surprise of everybody
who thought that the technology was in the public domain, without any patents
acting as a monopoly,” says Stroyd.
It was legal at the time to
submarine your patents, ruled the courts in patent infringement suits. The
document of “prosecution laches” was not a valid defense, said the
judge.
Arthur Stroyd explained
prosecution laches: “The prosecution part means simply that you’re
prosecuting a patent. Laches are delays, so the phase means delays in
prosecution.”
Most people are familiar
with that statute of limitations that says you have a certain number of years
to bring a lawsuit or some finite period of time. According to Arthur Stroyd,
the doctrine of laches is a little bit fuzzier and is applied by the courts to
somebody who has a cause of action and doesn’t do anything about it.
“The doctrine says, ‘You sat on your thumbs while others were
relying on the fact that nothing was going on; they relied to their detriment
on the fact that they did not know you were going to pursue this
claim.’”
In a recent development,
the U.S. Court of Appeals for the Federal Court has overturned the trial judge
and allowed the doctrine of prosecution laches to be used by the Auto ID
manufacturers in their declaratory action against Lemelson. This action would
bar Lemelson from enforcing certain patents because of “unreasonable and
unexplained delays.”
Although the doctrine of
laches is a defense for somebody being sued for patent infringement, in this
case the manufacturers were plaintiffs in an action to get Auto ID declared in
the public domain and make Lemelson’s patents unenforceable
Now the question is whether
Lemelson will appeal to the U.S. Supreme Court. A lot of questions will have to
be answered before you’re free to install a bar code system without
getting a license.
Bernie Knill, contributing editor, bernknill@aol.com
