A controversial verdict against Swedish inventor Hakan Lans will be reconsidered soon in the U.S. federal court of appeals. Millions of dollars are at stake, and who they are awarded to depends on the answers to the following questions: Does Lans own the color graphics patent, or does his company own it? And did he lie about it?
On Oct. 6, more than six years after the original verdict, the Lans case will be tried in the U.S. Court of Appeals for the Federal Circuit, in Washington, D.C. Three new judges will reconsider the case, which involves the inventor, Dell, Gateway and Lans’ former lawyers. If the original verdict stands, Lans will lose more money than he could probably ever afford to pay. If the verdict is overturned, some of the parties will have egg on their faces.
The case concerns Lans’ 1981 patent on color graphics, the technology used to operate color displays on computers.
After a much-publicized court case in the 1990s, Japanese computer manufacturer Hitachi agreed to pay license fees to Lans for using his patent. IBM.soon followed suit. Eventually, most major computer manufacturers, including HP and Apple, agreed to pay — except for Dell and Gateway.
Lans is a renowned inventor who is also known for his GPS navigation system STDMA, which has been accepted as the international standard for aviation and navigation.
Lans brought a case against Dell and Gateway in 1997, demanding that they pay license fees. Gateway’s lawyers countered that Lans was not the patent’s owner. They argued that he had transferred ownership to Uniboard, a one-man company that Lans owns.
In 2001 the District Court for the District of Columbia delivered its verdict. It determined that Lans had intentionally deceived his lawyers regarding the ownership of the patent. Why he would have done so was not explained. The court ordered Lans to pay his court expenses as well as those of Dell and Gateway.
When Lans sued his own lawyers later for misrepresenting him, the same judge found against him and decided he should pay their costs too. The exact amount has not been calculated, but it’s estimated to be around $100 million.
The matter of the patent, and whether Dell and Gateway are in fact using the patented technology, and whether they should pay for it, was never addressed by the district court.
According to Lans, the responsibility for any mistake lies with his previous lawyers. An archived fax message suggests that he sent instructions to his lawyers concerning ownership of the patent, authorizing them to make any required changes before they filed the lawsuit. This was not done.
“I can’t understand why Dell and Gateway are acting like this,” Lans says, “because I certainly do not have the kind of money that they’re expecting to collect.”
Dell disputes this description, saying that other PC vendors had settled with Lans before discovering that he had never held proper ownership of the patent, according to Dell spokeswoman Jess Blackburn.
The judge on Oct. 6 will not reconsider the facts of that case but merely determine the share of attorneys’ fees Dell may collect from Lans in punishment for his egregious actions, Blackburn says. Asked to predict the outcome, she declined to comment on matters involving pending litigation.
Gateway did not return a call for comment.
The case has kept Lans occupied full-time for eight years, he says, when he could have been working on new inventions.
“All I want to do is to leave this behind me,” he says.
He says he will donate any license fees to charity. The patent expired in 1999, but if the court of appeals rules in favor of Lans he will be able to collect millions of dollars in licensing fees retroactively.
The case has attracted much attention in Europe and, obviously, in Sweden. Margot Wallström, vice-president of the European Commission, has asked the World Trade Organization to look into the matter. The question is whether non-American patent holders are protected in American courts.
(Ben Ames, in the IDG News Service Boston Bureau, contributed to this report.)
