MSI Offers Rival Telxon a Chance to Settle Lawsuit for $20 Million

MSI Data Corp. in Costa Mesa has proposed settling its patent infringement lawsuit and other litigation against rival Telxon Corp. for a $20-million cash payment by Telxon.

MSI contends that Akron, Ohio-based Telxon might have to pay between $15 million and $77 million in damages if MSI wins the patent suit, according to an MSI filing with the Securities and Exchange Commission. The suit, which dates back to 1985, is scheduled to go to trial Nov. 22.

MSI also said it will drop all claims it has filed in connection with Telxon’s $20-a-share hostile takeover attempt. MSI rebuffed the Telxon bid and has accepted a $23-a-share buyout offer from Symbol Technologies of Long Island, N.Y.

“With the trial coming up Nov. 22, we felt it was appropriate to give them (Telxon) the opportunity to settle the suit,” said Paul Schneider, MSI’s chief financial officer.

Schneider said MSI’s settlement offer expires at 5 p.m. Monday. He said Thursday that Telxon has not yet responded.

Besides the cash settlement, MSI’s proposal would require Telxon to sign a license for technology used in certain of its products.

Both MSI and Telxon manufacture portable data terminals used to track inventory in supermarkets and warehouses.