Telescope Maker Claims Technology Being Stolen
Telescope maker Meade Instruments Inc., bruised by a rough economy and dragged down by high inventory levels, said Monday that its breakthrough technology is being ripped off by competitors.
The industry’s largest manufacturer said it has sued two of its major rivals in federal court in Santa Ana on claims they are illegally using its latest patented technology, which allows telescopes to zoom in automatically on stars or other objects in the galaxy.
“Everything we plan to do in the next 10 years is based on these technologies,” said John C. Diebel, the company’s chairman.
The suit, filed Thursday in Santa Ana, accuses Tasco Sales Inc. of Miramar, Fla., and its subsidiary, Celestron International Inc. of Torrance, of copying a patent for technology that automatically positions a telescope to focus on a desired object.
A Tasco executive did not return calls for comments, and Celestron executives couldn’t be reached for comment.
The technology has allowed Meade to put computerized finders, which automatically focus on selected objects, on amateur scopes costing $300 to $400. The feature previously had been available only on professional products costing $2,000 and more.
For Meade, the new technology, along with a number of pending patents, is key to its future. But the company may find itself in court for a while.
“We’re seeing some other companies copy this technology, too,” said Robert Davis, vice president for business development and assistant general counsel. “We haven’t initiated lawsuits yet, but we’re looking at the merits of cases against two or three others.”
The technologies also have helped to broaden a market that stands at about $250 million a year, Diebel said. Meade posted $123 million in revenue for its last fiscal year.
Davis said Meade warned Tasco and Celestron in August 1999 to stop copying its technology, but waited for a final patent to be issued before suing to make a stronger case in court. That patent was issued Wednesday.
Meade, meanwhile, has been working to bounce back from a glut of telescopes on the market, the bankruptcies of several retailers that sold its products and a sour economy.
Meade, which went public in 1997, sells a range of telescopes from low-end models produced in Asia to high-end, professional models made in its Irvine facilities, where 330 people are employed.
In January, the company fired about 60 of its 570 employees worldwide, then posted a loss of $4.7 million for its fourth quarter ended Feb. 28.
The company has steadily improved in the current fiscal year, posting a $760,000 profit in its second quarter ended Aug. 31, although sales slid 24% to $27.2 million. Meade also pared its inventories from $41.6 million to $33.4 million in the first six months.
And it has hired back most of the fired workers, Davis said.
Industry analyst Timothy Conder at A.G. Edwards & Sons said Meade is taking the right steps to get through troubled times.
The company also wants to diversify, and Conder said a March 2000 deal with TeraBeam Networks Inc. could be a big step. TeraBeam has developed technology that uses lasers to transmit wireless signals from the end of one set of fiber-optic lines to, say, a building wired with fiber-optics. Meade is supplying technology essential for transmitting the signal.
Meade stock, which soared to $39.25 a share in the weeks after the TeraBeam deal was announced, plummeted to a three-year low of $3.15 a month ago. It gained 16 cents Monday to close at $3.85 a share on Nasdaq.
