Magnequench sues Compaq and HP

Magnequench, a manufacturer of magnetic powders and magnets, has filed suit against 10 major electronic and computer firms for infringement of four of its patents.

Magnequench International, a manufacturer of specialised magnetic powders and magnets, has filed suit in the United States District Court for the Southern District of New York as well as Indianapolis against 10 major electronic and computer firms in the United States, Asia and Europe for infringement of four of its patents.

The subject matter of the lawsuits involves neodymium-iron-boron (Nd-Fe-B) magnets and magnetic materials used for small motors in most computers and many popular consumer electronic products, as well as automotive and industrial applications. For instance, the magnetic material is used in CD and DVD-ROM drive spindle motors found in computers and home entertainment systems and in the motors that operate the zoom lenses of camcorders.

Archibald Cox, Jr., president and CEO of Magnequench, commented, ‘We did not want to file these suits but we were forced to in order to protect our intellectual property investments and the interests of our customers who play by the legal rules. Many of our customers have strongly encouraged us to take this action, and we previously sent warning letters to suspect companies.’ He added, ‘Our patent position is strong. Our proof of infringement is indisputable, and our patents have been validated previously by the International Trade Commission. We intend to prosecute infringers vigorously.’

Magnequench used the services of an outside independent testing laboratory to that products produced and sold by those named in the complaint used infringing material.

The firms named as defendants in the infringement suit are Acer America; Acer; Best Buy; Circuit City Stores; CompUSA, and its parent, Grupo Sanborns; Philips Business Electronics North America, Philips Business Electronics International; Koninklijke Philips Electronics; Samsung Electronics America; Samsung Electronics; Sony Computer Entertainment America; Sony Computer Entertainment; Toshiba America Electronic Components; Toshiba America; and Toshiba Corporation.

A similar suit was filed in Indianapolis against Compaq Computer Corporation and Hewlett-Packard Company.

The suits charge that the named companies have infringed on four patents covering Nd-Fe-B magnets and magnetic materials.

Magnequench asks the court for past damages measured by no less than a reasonable royalty, treble damages, a recall of all existing products of the defendants that infringe and the destruction or reconfiguration to non-infringing embodiments of all infringing products.

Since their invention in 1982 and subsequent introduction, Nd-Fe-B magnets have been recognised as being a significant advance over prior materials. The high magnetic strength of the Nd-Fe-B magnets permits the miniaturisation of many products that use permanent magnets. The two largest markets for the patented products are computer data storage and automotive, which together account for 55 percent of the overall Nd-Fe-B market.

Mr. Cox noted, ‘Our patents extend to 2007 and beyond. But, we are not hiding behind our patents. We understand how important costs are to our customers. We have promised and delivered price reductions of more than 7.5 percent a year for the past three years and we plan to continue on the same path through at least 2005.’

The global permanent magnet market is about $6 billion. Nd-Fe-B magnets and magnetic materials, the materials involved in the present suit, account for about $2.4 billion of the dollar share of the industry.

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