Harlequin Files Suit Challenging EFI's Business Practices

Jan 04, 2000, 00:00 ET from Harlequin

    WALTHAM, Mass., Jan. 4 /PRNewswire/ -- Harlequin announced today that it
 has filed a lawsuit against Electronics for Imaging, Inc. (Nasdaq:   EFII)
 ("EFI") claiming that EFI has violated the Lanham Act, a federal law which
 governs, among other things, false advertising.  In its complaint, Harlequin
 charges that EFI has violated the Lanham Act by telling Harlequin's OEM
 customers that Harlequin's products infringe EFI's patents when EFI knows or
 should know that their allegations are false.  In addition to federal claims,
 the suit also claims that EFI has violated several Massachusetts state laws,
 including defamation and the Massachusetts Unfair and Deceptive Acts and
 Practices Statute.  The suit, filed on January 3, 2000 in the United States
 District Court in Boston, Massachusetts, seeks to prevent EFI from
 disseminating to Harlequin's OEM customers and the industry at large false
 claims that Harlequin's products infringe EFI's patents as well as recovery of
 unspecified damages.
     According to Harlequin, the suit was triggered by EFI's recent letters to
 several of Harlequin's OEM customers threatening them with legal action if
 they continue to sell Harlequin products that EFI falsely claims infringe on
 its patents.  Harlequin believes that EFI has resorted to these pressure
 tactics because EFI has been unable to find any legal support to prove its
 claims of patent infringement as alleged in its lawsuit filed in November
 1998.  In addition, Harlequin noted that EFI has taken the desperate step of
 contacting a Harlequin OEM that does not even sell or license product into the
 United States.
     "In our opinion, EFI has embarked on a public campaign to smear
 Harlequin's products with the taint of infringement when EFI knows that it has
 no basis for its claims," stated Johan Volckaerts, Chairman of Harlequin
 Limited.  "EFI is clearly trying to frighten our customers and materially
 damage our business reputation.  EFI's allegations are completely unfounded,
 and we are particularly disturbed by EFI's threats to abuse the court's rules
 and attempt to drag our customers into its lawsuit," he said.
     In addition to commenting on the grounds for Harlequin's suit, Mr.
 Volckaerts confirmed that Harlequin has intensified its investigation into
 prior art and believes Harlequin will be able to successfully claim that at
 least two of the three EFI patents should be invalidated. "With only 2 years
 remaining on the 'Schreiber patent,' which is the core of EFI's intellectual
 property, EFI clearly is concerned about maintaining the validity of its other
 patents," he stated.  "In light of EFI's recent actions against Harlequin's
 customers, it is our opinion that EFI is accelerating its attempts to uphold
 its patents at any cost, even when it knows that the claims are unfounded."
 Volckaerts vowed that "Harlequin will continue to fully support its products,
 protect its OEM customers, and vigorously defend its rights in this
     The original complaint filed by EFI on November 6, 1998 in the United
 States District Court for the Northern District of California claimed that
 three of Harlequin's products, Harlequin(R) ScriptWorks(R), Harlequin Full
 Color System(TM) (HFCS(TM)), and Harlequin ICC Profile Processor(TM)
 (HIPP(TM)), infringe three patents owned by EFI. The three patents were: US
 Patent No. 4,500,919 (commonly known as the "Schreiber patent"), US Patent No.
 4,941,038 (originally issued to Eric Walowit), and US Patent No. 5,212,546
 (issued to Efraim Arazi).  Shortly after filing the original complaint, EFI
 acknowledged that ScriptWorks was named in the case only to the extent that it
 enabled use of HFCS and HIPP.  In its most recent letters to Harlequin OEMs,
 EFI has changed its position without explanation.
     With a large and growing base of OEM partners, Harlequin is recognized
 worldwide as a leading supplier of open systems-based software for digital
 printing and publishing applications.  Established in 1986 and acquired in
 July 1999 by Global Graphics (EASDAQ: GLGR), Harlequin has grown into an
 international software company with world-class expertise in high quality
 digital printing and publishing technologies.  For more information about the
 company, please visit Harlequin's Web site at www.harlequin.com.
     Harlequin and ScriptWorks are registered trademarks and Harlequin Full
 Color System, HFCS, Harlequin ICC Profile Processor, and HIPP are trademarks
 of Harlequin Limited.  All other brand or product names are the trademarks or
 registered trademarks of their respective owners.  Harlequin makes no warranty
 and accepts no liability for any loss or damage arising from the use of
 information or particulars in this document.

SOURCE Harlequin