Electronic Communication company is awarded $57 million in patent infringement case
Celeritas Technologies prevails over Rockwell International in patent litigation
Industry: Communication Technologies
Defendant: Rockwell International Corp.
Plaintiff: Celeritas Technologies Inc.
Jurisdiction: U.S. District Court of Los Angeles (Supreme Court denied appeal)
Result: $57 million verdict
Source: Los Angeles Times, “Tiny Firm Wins Case vs. Rockwell.”
When the U.S. Supreme Court refused to hear Rockwell International’s appeal in January 1999, Celeritas Technologies Inc. was awarded $57 million in patent infringement damages. A prolonged legal fight had taken a financial toll on the two-employee, closely-held communications company. During the drawn-out patent litigation process, the company was able to focus on little else.
The Supreme Court’s decision came approximately two years after a federal jury found Rockwell liable for patent infringement, misappropriate of trade secrets and violation of a nondisclosure agreement. Celeritas was awarded approximately $57 million and with subsequent interest added will receive about $64 million in its damages award.
In 1995, Celeritas settled a similar lawsuit with AT&T for approximately $6 million. After AT&T, Celeritas expected Rockwell to agree to a settlement.
According to the Los Angeles Times, the most employees Celeritas had employed at one time is six. Rockwell International split in 2001 into two separate companies, Rockwell Collins and Rockwell Automation. According to their Web sites, Rockwell Collins employs 19,000 worldwide with $3.86 billion in sales for 2006, and Rockwell Automation also employs 19,000 worldwide with $5 billion in sales for 2006.
Tara's Take
This case illustrates what a toll patent infringement lawsuits can take on a small company. It was reported by its attorney that Celeritas was virtually dormant during the time of this suit, being consumed by the demands of legal proceedings. This involvement was necessary even after Celeritas was successful in asserting its claims against AT&T. The case serves to illustrate the conundrum small companies have in asserting patent infringement claims. The small companies are at a significant disadvantage when it comes to pursuing patent infringement: They often do not have the resources to fund protracted patent litigation as well as maintain market position, but they also do not have the choice but to assert patent claims or else they will lose whatever market position they have to infringers. This is where a contingency patent litigation can offer an alternative litigation option to certain patent owners.
