Path: utzoo!news-server.csri.toronto.edu!cs.utexas.edu!uunet!hayes!tnixon
From: tnixon@hayes.uucp
Newsgroups: comp.dcom.modems
Subject: Re: Hayes Microcomputer lawsuit???
Message-ID: <3823.27d23b2f@hayes.uucp>
Date: 4 Mar 91 12:18:55 GMT
References: <1510@public.BTR.COM>
Organization: Hayes Microcomputer Products, Norcross, GA
Lines: 61

In article <1510@public.BTR.COM>, cec@public.BTR.COM (Cerafin E.
Castillo  cec@btr.com) writes: 

> I recently heard that Hayes Microcomputer was in the midst of a lawsuit
> in regards to technology it (Hayes) develops, sells, or licenses.  I did
> not catch any specifics since it was mentioned on a stock market report
> and technical or company comments were not made known.
> 
> Can anyone enlighten me on this issue?  Toby, what is the company line?

Of course, I have much more detail available here than you could 
possibly be interested in, but in a nutshell:

In 1985, Hayes was granted U.S. Patent 4,549,302 entitled "Modem 
with Improved Escape Sequence", which covers modems which use a 
guard time in conjunction with a character sequence to move from 
online data state to command state.  Most modems that claim Hayes 
compatibility perform such a function and make use of the patented 
technology.  In 1986, Hayes began efforts to enforce the patent, 
establishing a licensing program and contacting over 170 modem 
manufacturers offering to license the patent.  Many companies 
subsequently licensed the patent, and continue to do so today.

Back in 1987, however, several companies brought suit against Hayes,
charging an attempt to monopolize the modem industry.  Hayes sued
these companies for willful patent infringement.  The monopolization
claim was subsequently thrown out in summary judgement (it's
inconceivable to me how anybody could look at the modem market and
even begin to think that Hayes has a monopoly!), and the patent
infringement case continued. 

In January of 1991, a jury trial was held in US District Court in
San Francisco.  The Heatherington '302 patent was found to be valid,
and Everex, Omnitel, and Ven-Tel were found to have willfully 
infringed the patent.  The total amount of damages awarded by the 
jury was approximately $3.5 million.  Because of the willful 
infringement, the judge may treble these damages and also require 
the defendants to pay Hayes' litigation costs and interest back to 
when the companies were notified of the patent; a hearing on this is
scheduled for April 5th. 

Prometheus was also a defendant, but they settled on the eve of the 
trial and are now a licensee.  USRobotics was also a defendant at 
one point, but they settled some time ago and entered into a broad 
cross-license with Hayes at that time.

A similar patent infringement trial is currently pending against 
Multi-Tech, and Hayes intends to actively work to enforce its 
intellectual property rights against other infringers.

I'll try to answer any other questions you might have, but am 
constrained to what has been mentioned in official company press 
releases since the matter is still before the courts.

	-- Toby

-- 
Toby Nixon, Principal Engineer    | Voice   +1-404-840-9200  Telex 151243420
Hayes Microcomputer Products Inc. | Fax     +1-404-447-0178  CIS   70271,404
P.O. Box 105203                   | UUCP uunet!hayes!tnixon  AT&T    !tnixon
Atlanta, Georgia  30348  USA      | Internet       hayes!tnixon@uunet.uu.net