2014

Research Corporation Technologies, Inc.'s $800 Million-Plus Patent Infringement Lawsuit Against Hewlett-Packard Goes to Trial Today Breakthrough Method for 'Halftoning' at Issue



Undisclosed Document Drafted by HP Lawyer Will be One Focus of Trial



    TUCSON, Ariz., Nov. 29 /PRNewswire/ -- A patent infringement lawsuit
 against Hewlett-Packard Company (NYSE:   HWP), seeking damages that could exceed
 $800 million, will go to trial today in the U.S. District Court, District of
 Arizona, in Tucson.
     The plaintiff, Research Corporation Technologies, Inc. of Tucson, asserts
 in the lawsuit that HP, the world's largest maker of printers for computer
 use, willfully infringed on patents covering a breakthrough technology
 developed by researchers at the University of Rochester.  Rights to the
 patents were assigned by the university to Research Corporation Technologies,
 a company that helps universities commercialize technology developed at their
 laboratories.
     The trial will include important testimony related to a draft patent
 infringement opinion created by an HP staff lawyer, which was not timely
 disclosed by HP during the discovery process despite a specific request for
 it.  The court ultimately sanctioned HP for its failure to timely produce the
 document.
     "We are dismayed that Hewlett-Packard would choose to use this patented
 technology developed at the University of Rochester without securing a license
 to it, especially when they had an early opportunity to do so," said Timothy
 J. Reckart, senior vice president of Research Corporation Technologies.
     "We find it particularly ironic that, on the eve of the trial,
 Hewlett-Packard would unveil a new $200 million advertising campaign built
 around the honored legacy of invention of the company's co-founders.  HP's
 actions are certainly not consistent with what the company calls 'the HP gene
 - the DNA to invent.'"
     The lawsuit states that "HP printer products including
 DeskJet(TM)/DeskWriter(TM), PaintJet(TM), DesignJet(TM), and OfficeJet(TM)
 models, as well as any device incorporating HP's ColorSmart(TM) technology,
 utilize a method for halftoning gray scale images that infringes upon" the
 University of Rochester patents.  The scope of products identified in the
 complaint would include most HP printers produced in recent years, including
 the DeskJet and DeskWriter 300, 400, 500, 600, 700, 800, 1200, 1600 series,
 DesignJet 300, 600, 700 series, and OfficeJet 500 and 600 series.
     HP was aware of the issuance of the patent as early as May 1992, "and
 entered into and continued in licensing negotiations with Research Corporation
 Technologies regarding the technology" until December 1993, the lawsuit
 states.  HP's infringement of the patent has been "willful and deliberate,"
 and "has caused and will continue to cause irreparable injury" to Research
 Corporation Technologies, the lawsuit says.
 
     Patents Cover Technology that Revolutionized Computerized Image Printing
     A total of six patents have been issued covering the technology, beginning
 in 1992, to Kevin Parker, a professor in the engineering school at the
 University of Rochester, and Theophano Mitsa, who was a graduate student at
 the university at the time, and working with Dr. Parker.  The patents cover a
 concept known as "Blue Noise Mask."  It makes possible the rapid creation of
 high quality halftone (grey scale) images using ink jet and color printers.
 Commercial rights to the patents were assigned to Research Corporation
 Technologies under a long-term technology evaluation and commercialization
 agreement with the University of Rochester dating back to 1953.  Although
 Research Corporation Technologies is the plaintiff in the case, the majority
 of the funds received will go to the University of Rochester.
     "Before Parker and Mitsa developed this powerful new technology, you had
 to choose between quality and speed to create halftone images on computer
 printers," said Mr. Reckart.  "One method, called dithering, is fast but makes
 a crude image.  The other, called error diffusion, produces good images but is
 very slow.  Parker and Mitsa's Blue Noise Mask produces images as fast as
 dithering and with even better quality than error diffusion."  At the time of
 the invention, the Blue Noise Mask was 45 times faster than error diffusion.
     The original patent describes the Blue Noise Mask as "a method of and
 system for rendering a halftone image of a gray scale image by utilizing a
 pixel-by-pixel comparison of the gray scale image against a Blue Noise Mask."
 The technology is used in computer printers, fax machines, the graphic arts
 and printing industry, and other applications that use halftone (dot screen)
 methods to create images that give the human eye the impression of a
 continuous range of grey tones while using only black dots separated by white
 spaces.  The concept is equally applicable to color imaging, and the patents
 specifically cover color applications.
     The Blue Noise Mask has been licensed to more than a dozen computer
 printer makers, fax machine makers, and others.  However, HP has denied
 Research Corporation Technologies' requests for licensing fees covering HP's
 ColorSmart technology, and Research Corporation Technologies' claim that HP
 products infringe the Blue Noise Mask patents.
 
     In-House Infringement Opinion Will be Part of Proof at Trial
     An internal HP document will become an important part of the trial.  It is
 a draft infringement opinion, created in May 1993 by an in-house HP lawyer,
 discussing the likelihood that HP might be infringing on the University of
 Rochester patents.  The existence of any internal infringement opinion was not
 acknowledged by HP during most of the discovery period.
     HP belatedly produced the document, but at a time when relevant witnesses,
 who likely had knowledge of the infringement opinion, had been deposed by
 Research Corporation Technologies without the company having the benefit of
 the information contained in the infringement opinion, court records show.
     As the court order indicates, the giant computer printer maker failed to
 produce the document earlier in the discovery proceedings, even though it fell
 within the scope of Research Corporation Technologies' disclosure demands.
 U.S. District Court Judge John M. Roll, who was presiding over the case at
 that time, issued an order sanctioning HP for the non-disclosure.  The
 document "should have been disclosed," he wrote in a ruling signed
 July 30, 1997.  It "provides an infringement analysis which places it in the
 category of documents subject to RCT's discovery demands."
     The court order also indicates that HP fought to prevent its disclosure,
 downplaying its significance and describing it as a mere memorandum rather
 than a draft infringement opinion.  However, the document describes itself as
 "a draft infringement opinion on whether (HP employee) Qian Lin's dithering
 method would infringe the Parker & Mitsa patent."
     Mr. Reckart of Research Corporation Technologies described the document as
 "a very significant piece of evidence in the case, as indicated by the court's
 sanction for withholding it."  In marketing materials, HP has promoted the
 significance of its ColorSmart technology, which relies heavily on Blue Noise
 Mask technology, by stating that autofocus "point and shoot" cameras are "an
 apt analogy" to ColorSmart technology.  "ColorSmart, with its choice of
 automatic or manual color, is designed to deliver the same benefits as the
 autofocus SLR -- bringing simplicity and automation to first-time users, and
 both choice and control to more experienced users," an HP brochure says.
     HP's computer printer sales increased significantly after the introduction
 of ColorSmart in 1994.  HP recently announced that it has sold 100 million
 computer printers.
     Damages arising from the lawsuit will have to be determined at trial, but
 could be very large, Mr. Reckart said.  Publicly available numbers show that
 HP has sold more than $25 billion worth of inkjet computer printers since
 1994.  Mr. Reckart asserts that most of those printers, and other HP products,
 infringe on the patents.  "By our calculations, the royalties that HP should
 have paid and should now pay exceed $800 million," Mr. Reckart said.  That
 amount would approach the largest patent damages lawsuit in U.S. history,
 $873 million in the Kodak-Polaroid case.  Moreover, the lawsuit seeks treble
 damages "as a result of HP's willful and deliberate infringement" of the three
 patents, as well as an injunction to preclude HP from further violation of the
 patents.
     Research Corporation Technologies's lead counsel is Raphael V. Lupo of the
 Washington DC office of McDermott, Will & Emery.  He is a widely known expert
 in intellectual property law.
     Research Corporation Technologies, Inc. is the world's most successful
 independent technology management organization.  It commercializes
 technologies from universities and research institutions throughout the United
 States, Canada and Australia.  Commercialization vehicles include venture
 development of early-stage technologies, seed investments, partnerships, and
 licensing.  More information is available at http://www.rctech.com.
     The University of Rochester, located in Rochester, NY, is one of the
 nation's leading research universities.  Widely known for its engineering
 school, it also is home for a major medical school and the Eastman School of
 Music.  More information is available at http://www.rochester.edu.
 
 

SOURCE Research Corporation Technologies, Inc.

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