Lemelson Case Ends, New Patent Threat Appears

Machine Vision Online has learned from Cognex that the Supreme Court appeal deadline has passed and the Lemelson Foundation did not file for certiorari.  Accordingly, the Lemelson matter has been completely resolved in Cognex's favor.  The 16 patents are invalid and unenforceable.  This Cognex success has saved industry in excess of $1.5 billion dollars that might otherwise have been paid to Lemelson for patent licenses.  Lemelson's pending cases against dozens of companies in Phoenix relating to the machine vision and bar code patents have been dismissed thus saving those defendants millions of dollars of legal fees.

However, Cognex reports that there is a new licensing program by another organization using identical tactics to attack numerous industries in the U.S., Europe and Japan.  It involves a patent covering 2D symbology reading; in particular, they claim any company reading a data matrix code infringes U.S. patent 5,612,524.  Data matrix codes are widely used on packaging for tracking and identification purposes.  Acacia Research Corporation and Veritec Inc., the owner of the patent, have teamed up for the licensing program through their subsidiaries VData LLC and VCode Holdings.  Several lawsuits are pending against defendants in Minnesota but many companies have already settled.  Cognex has investigated the '524 patent and believes that it is invalid, unenforceable and not infringed by Cognex products.  Cognex has obtained an independent opinion of counsel regarding the '524 patent and believes that license fee payments are gratuitous.  The license fee demands are sufficiently below legal expenses to entice companies to settle.  As with Lemelson, Veritec has not asserted against Cognex or other symbology reading equipment suppliers because they create the opportunities to make claims against end users.

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Cognex decided to protect its customers by filing for Declaratory Judgment in the US District Court for Minnesota on March 13th, 2006. 

Cognex is establishing a fund to fight the new case.  Companies who seek more information about the case or the fund should contact Mike Steir, Cognex’s Vice President, Corporate Legal Services.