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Scanner Makers Battle Over Patents With Eugene, Ore.-Based PSC Inc.

Posted on: Wednesday, 7 July 2004, 06:00 CDT

Jul. 7--Lawsuits usually are bad news for companies. But Eugene-based bar-code scanner maker PSC contends that its patent infringement disputes with two rivals are actually a good sign.

In the litigious bar-code scanning industry, the norm is for companies to lob suits back and forth seeking to protect their complicated proprietary technologies.

PSC's legal patent disputes slowed last year when it was in Chapter 11 bankruptcy restructuring. A Connecticut-based private investment group bought PSC and last summer PSC emerged from bankruptcy, transformed from a publicly traded company to a privately held one.

PSC has about 550 employees in Eugene, making it one of the Eugene-Springfield area's largest technology companies.

Now, the pace of PSC's legal disputes is picking up.

"When we were financially weakened and in bankruptcy, there wasn't much we could do about it," said Frank MacMurray, PSC's in-house general counsel.

"Now that the future of the company is not at issue, we feel we can invest the resources necessary to protect our very valuable intellectual property portfolio," he said.

In lawsuits filed in May in U.S. District Court in Oregon, PSC argues that NCR Corp. of Dayton, Ohio, and Metrologic Corp. of Blackwood, N.J., are infringing on PSC patents -- that is, using PSC technology without paying royalties to PSC. The patents are for a number of elements of PSC's laser scanners -- intricate devices that read bar codes. PSC is suing NCR and Metrologic each over different patents.

Metrologic representatives did not return a phone call from The Register-Guard requesting comment.

John Hourigan, an NCR Corp. spokesman, said the company cannot comment on pending court matters. However, he said, "NCR allocates considerable resources to the research and development of our products and business solutions, and we'll aggressively assert our legal rights to protect our patent portfolio."

PSC filed suit against NCR on May 12, shortly after NCR had filed a similar suit against PSC in Dayton. Those suits are on hold, allowing for settlement discussions under a negotiated "standstill agreement," MacMurray said. The standstill agreement expires at the end of Aug. 9, he said.

The suits filed by PSC claim that the competitors are infringing patents on PSC technology, generally for fixed scanners. They ask the court to stop the rivals from using the technology and to award damages to PSC. The legal papers include a raft of exhibits showing detailed drawings and descriptions of patented technology.

It's unclear how long it will take to resolve the disputes and how they'll affect PSC's bottom line.

"You always hope they will get resolved quickly," MacMurray said. "But it's not uncommon for cases that involve patents to take three or four years to go from filing to a final trial," he said. "These cases typically involve experts, and it just adds a layer of complexity to cases that aren't present in cases that involve personal injury or contracts or property."

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To see more of The Register-Guard, Eugene, Ore., or to subscribe to the newspaper, go to http://www.registerguard.com.

(c) 2004, The Register-Guard, Eugene, Ore. Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com.

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