Litton Wins Record $1.2-Billion Patent Award : Aerospace: Federal jury finds that Honeywell stole mirror-coating technology used in aircraft navigation systems.
In the largest patent-infringement verdict ever, Litton Industries won $1.2 billion in Los Angeles federal court Tuesday on allegations that Honeywell Inc. stole its technology for coating mirrors used in aircraft navigation systems.
Litton officials said they believe the award will largely stand against legal challenges, although U.S. District Judge Mariana Pfaelzer, who heard the case, must still rule on Honeywell’s assertion that Litton improperly obtained the patent.
Honeywell general counsel Edward D. Grayson said he was “outraged” by the verdict and said subsequent rulings or appeals might eliminate the award altogether. Honeywell denied using any Litton technology.
Trading was halted in both Litton and Honeywell prior to the announcement. Honeywell shares closed up 87.5 cents at $38.875 on Tuesday. Litton closed at $66.50, up $1. Both trade on the New York Stock Exchange.
Litton said it developed a special process to deposit reflective coating on small mirrors inside ring laser gyroscopes, used in commercial aircraft navigation systems. Honeywell adopted the Litton process after it ran into problems with its own mirror technology, said Norman L. Roberts, Litton senior vice president and general counsel.
The award is the latest in a series of massive verdicts since the early 1980s, when the federal judiciary strengthened the ability of major corporations to bring patent-infringement cases, according to Tony Karambelas, patent counsel at Loral Corp., the New York aerospace firm.
“Patents are serious business now,” he said. “The U.S. went from having the weakest patent system in the world to having the strongest. You can see it now in a number of these cases. This Litton award is a glowing endorsement of the system.”
Loral has sued Japanese makers of video camcorders, alleging they stole the technology for making the seeing eye of the recorders, known as a charge couple device. The case is potentially worth more than $1 billion. Honeywell earlier won $250 million from Japanese camera makers for its automatic-focusing technology. And Hughes Aircraft stands to win more than $1 billion from the U.S. government for infringement of its system to control satellite orbits.
Aerospace industry awards tend to be so high because of the high value of the products themselves. The jury award to Beverly Hills-based Litton compensated the firm for lost past and future profit on billions of dollars’ worth of navigation systems.
Honeywell, based in Minneapolis, invented ring laser gyroscopes in the 1960s and introduced them to the market in the late 1970s. By the following decade, the firm was dominant in the commercial marketplace, though Litton was the major supplier to the Pentagon.
Litton, however, invented a process of depositing coatings using ion beams in the 1970s and then won a reissue of the patent in 1989. Honeywell claims that its own electronic beam system for coating the mirror is different than Litton’s, an assertion rejected by the jury.
But Honeywell also alleged that Litton acted improperly when it obtained the reissue of the patent in 1989, a charge known as inequitable conduct. Prior to the jury’s verdict, Pfaelzer threw out Litton’s infringement claims involving sales prior to 1989. Pfaelzer must still rule on the charge.
Roberts, the Litton attorney, said the firm may yet sue Honeywell for infringing on its patents on military systems, allegations that would go to the federal Court of Claims rather than U.S. District Court. It may also seek an injunction prohibiting further sales of Honeywell systems using the Litton process, he said.
“Right now, we are just getting used to what we got today,” Roberts said.
But Honeywell President D. Larry Moore asserted that the verdict would not affect his firm’s ability to serve the aviation market: “Litton’s lawsuit is an attempt to recover in the courtroom what it couldn’t in the competitive marketplace.”
