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From: kurt@pnet51.orb.mn.org (Kurt Sletterdahl)
Newsgroups: gnu.misc.discuss,comp.misc,comp.dcom.modems
Subject: Re: hayes lawsuit
Message-ID: <4913@orbit.cts.com>
Date: 14 May 91 21:25:01 GMT
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Organization: People-Net [pnet51], Minneapolis, MN.
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The following is a small portion of a Hayes press release,
giving their version of how the litigation started:
 
"The Patent involved in the lawsuit, known as the Heatherington '302
Patent, was issued to Hayes on 22 October 1985 and covers the escape
mechanism implemented in every Hayes Smartmodem product.
 
A year after the Patent issued, Hayes was sued in San Francisco by a
consortium of manufacturers of Hayes-compatible modems who challenged the
Hayes Patent.  The consortium named themselves the Modem Patent Defense
Group.  Although most of the members of the consortium eventually took
licenses under the Patent, Ven-Tel, Everex and OmniTel refused to respect
the Patent and forced Hayes to undergo a jury trial."
 
The following is a more recent Hayes press release on the subject. As for
who was right in this dispute, the jury verdict and Judge's comments speak
for themselves. No, I am not directly or indirectly associated with Hayes.
 
         "HAYES GRANTED ADDITIONAL DAMAGES AND ATTORNEYS' FEES
                   IN SAN FRANCISCO PATENT LITIGATION
 
        Atlanta, GA,  22 April 1991 -- U.S. modem maker Hayes
Microcomputer Products, Inc. was granted additional damages and attorneys'
fees today by Federal Judge Samuel A. Conti in San Francisco in the
long-standing patent dispute with Everex Systems, Inc., Ven-Tel, Inc. and
OmniTel, Inc.  The rulings were issued just three months after a San
Francisco jury found that the Heatherington '302 Patent was valid,
enforceable and willfully infringed by the defendants.  The total award to
Hayes from these defendants now stands at approximately $10 million.
 
        Because the Jury had found in late January that the infringement
by Everex, Ven-Tel and OmniTel was willful, Judge Conti doubled the
damages awarded by the Jury.  In support of his doubling the award, Judge
Conti said that these willful infringers must not be allowed to have
infringed a valid patent for five or six years and then only have to pay a
1.75% royalty to the owner of the valid patent.  The Judge then stated,
"This is particularly the case where, as here, it is undisputed that Hayes
offered defendants an opportunity to license the patented technology, at
terms similar to those offered by Hayes to many other competitors, and
defendants did not even bother to respond."  Judge Conti also noted that
the defendants "clearly adopted, early on, a strategy of long-term,
expensive litigation -- while continuing to sell products which they were
on notice might very well be infringing -- rather than making any attempt
to deal with Hayes directly."
 
        Judge Conti also granted Hayes request for attorneys' fees and
expenses of litigation.  In support of this award, Judge Conti relied
heavily on the finding of willful infringement and noted that, "Hayes, in
short, has been put to an enormous and expensive burden in litigating this
case and a jury has reasonably found that defendants willfully infringed
Hayes' valid patent."  Judge Conti strongly emphasized the need to prevent
further infringement of the Hayes patent.  "The court hopes that its
holding will serve to help deter would-be future infringers from plunging
into complex, expensive litigation, while continuing their infringing
behavior, in the absence of more of a good faith belief in the rightness
of their cause than defendants apparently had here."
 
        Hayes was also awarded prejudgment interest to be added to the
damages for infringing sales dating back to the beginning of the
infringement for each defendant.
 
        The Court also denied the defendants' request that the Jury
verdict be overturned.  After reviewing all of the evidence in the trial,
Judge Conti concluded that the Jury made a "reasonable conclusion" on all
issues and that there was "substantial" evidence in support of the Jury's
findings.
 
        "The Judge's decision to double the damages awarded by the San
Francisco Jury and award attorneys' fees and expenses to Hayes confirms
the strength and significance of the Jury's verdict," said Hayes President
Dennis C. Hayes.  "We are glad to see that disrespect for valid patents
and the patent system will not be tolerated by the courts."
 
        The Patent involved in this lawsuit, known as the Heatherington
'302 Patent or the Modem With Improved Escape Sequence, was issued to
Hayes on 22 October 1985, as United States Letters Patent Number
4,549,302.  The escape sequence mechanism has been used by Hayes for the
past decade in every one of its Smartmodem products.  Since the first
Smartmodem product was shipped on 16 June 1981, all modem manufacturers
who have truthfully made the claim that their modems are
"Hayes-compatible" have used the same escape sequence mechanism.  "This
technology has withstood the test of time," said Dennis Hayes, "and no one
has demonstrated to the industry a better escape mechanism."
 
        In 1988, Multi-Tech Systems, Inc. of Minneapolis, Minnesota filed
an action similar to the San Francisco case against Hayes.  Hayes expects
to go to trial in Minneapolis later this year and will seek the same
result against Multi-Tech as Hayes obtained in San Francisco.  In
addition, because validity of the Heatherington '302 Patent has now been
upheld, Hayes will again seek additional damages and attorneys' fees for
willful infringement."
 
[Paragraphs Deleted]

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