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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