Intermec is in patent tussle

Published 9:00 pm Friday, March 11, 2005

EVERETT – Intermec Technologies Corp. is being sued by its biggest rival, Symbol Technologies, after the two companies tried unsuccessfully to reach a negotiated settlement over disputed patents.

Symbol also has stopped supplying a crucial component for some of Intermec’s bar-code scanners. Tom Miller, president of Everett-based Intermec, said that won’t slow down the company’s production of those devices, however.

Miller said the company “strongly believes there is no basis for this lawsuit.”

“These types of disputes are not unusual in high-tech companies as new technologies are brought to market,” Miller said in a written statement. “Intermec looks forward to court involvement. It gives us the opportunity to demonstrate and sustain our technology leadership.”

News of the lawsuit helped push down the price of shares in Unova Inc., Intermec’s parent company. Unova’s stock price ended Friday at $22.31, down 99 cents. Shares in New York-based Symbol lost 29 cents, closing at $15.39.

The lawsuit, filed in the U.S. District Court in Delaware, claims Intermec infringed on Symbol patents covering wireless communication, or WiFi, technology that’s incorporated in Intermec’s scanners and mobile computers.

Symbol said two of the four patents involved were found by a jury in the same court to be infringed by Proxim Corp. In 2003, Proxim was ordered to pay Symbol about $23 million based on a 6 percent royalty. Since then, Symbol has agreed to license the patents to other competitors for a fee.

Peter Lieb, senior vice president and general counsel for Symbol, said his company held licensing negotiations with Intermec as well, but the two sides could not agree.

The lawsuit seeks cash damages and a permanent injunction against Intermec’s use of the disputed technology.

Intermec already had a lawsuit pending against Symbol. In June, it sued Matrics Inc., alleging that Matrics’ radio frequency identification products use technology covered by Intermec’s patents. Symbol subsequently bought Matrics.

“So they’re now suing Symbol directly,” Lieb said.

Lieb, however, rejected the notion that the new lawsuit was filed as a direct response to Intermec’s case against Symbol.

“This is not a tit-for-tat. We genuinely feel we should prevail in this case,” he said.

The feuding companies already know each other well outside the courtroom. Symbol and Intermec are the top two providers of hardware and software in the automatic data capture industry, which includes bar-code scanners, radio frequency identification equipment and mobile computers used for inventory tracking.

In 2004, Symbol’s gross sales reached $1.7 billion, compared with $811 million for Intermec.

Intermec has aggressively defended its own intellectual property in recent years, most recently focusing on its patents related to radio frequency identification, or RFID. Symbol and other competitors say Intermec’s claims to RFID patents could slow adoption of the emerging technology.

Intermec is the biggest of two divisions that make up Unova Inc. As with Intermec, Unova is based in Everett.

The Associated Press contributed to this report.