Date: Aug 03, 2010 Author: Nick Brown Source: Law360 (
click here to go to the source)
Law360, New York (August 03, 2010, 1:59 PM ET) -- Material testing company MTS Systems Corp. has agreed to pay former competitor Hysitron Inc. $7.5 million to resolve allegations that it infringed two nanotesting patents and broke competition and trademark laws by using Google to link its own products to Hysitron searches.
Judge Ann D. Montgomery approved the accord Monday in the U.S. District Court for the District of Minnesota, with summary judgment motions from both sides still pending. The case had been slated for trial in October.
"There were two earlier settlement conferences that were under the auspices of the magistrate judge, and they were unsuccessful," Allen W. Hinderaker, an attorney for Hysitron, said Tuesday. "We chose to make one last effort through private mediation over a couple days time, and it finally worked."
An attorney for MTS did not immediately respond to a request for comment Tuesday.
MTS said it was content with the deal.
"We are pleased to have reached a settlement on this long-standing lawsuit," Chair and CEO Laura B. Hamilton said in a statement. "We believe it is in the best interest of the company to resolve this issue so we can move forward and focus on our business."
The stipulation does not include injunctive relief because MTS sold its nanotesting business after the filing of the suit, leaving Hysitron's money demands as the only pertinent issue.
Before the sale, Hysitron and MTS had been competitors in the nanoindentation field, developing technology capable of testing for materials at the micro- and nano-scale levels. The patents-in-suit each covered testing devices that incorporated sensor units to allow for surface imaging, Hinderaker explained.
Hysitron initially sued MTS for infringement in March 2007, then amended the complaint two months later to add counts of federal and state unfair competition law violations and trademark infringement.
The patent infringement was rooted in MTS's manufacture and sale of its Nano Vision product line, which Hysitron said infringed two patents it had held since at least 2000.
The plaintiff later learned that MTS bid for the keyword term ‘Hysitron' on Internet search engines, causing MTS advertising to pop up when consumers searched for Hysitron on sites such as Google, according to the complaint. The scheme led to significant consumer confusion, Hysitron claimed.
In all, the amended suit asserted seven claims for relief under federal trademark and patent laws as well as competition claims under the Lanham Act and Minnesota Deceptive Trade Practices Act. Hysitron sought injunctive relief, lost profits, treble damages with interest, and an order directing MTS to recall marketing and promotional materials.
"The best part about [the settlement] to me is that a $10-to-$15 million company like Hysitron could engage a $400 million company like MTS over three years to enforce its rights, and at the end of the day be successful," Hinderaker said. "It took quite a bit of courage."
The patents-in-suit are U.S. Patent Numbers 6,026,677 and 5,553,486.
Hinderaker, Tong Wu, William D. Schultz and Joshua P. Graham of Merchant & Gould PC represented Hysitron.
MTS was represented by Brent A. Lorentz, Daniel J. Kelly, David P. Pearson, Jessica Slattery Karich, William A. McNab and Karen A. Brennan of Winthrop & Weinstine PA.
The case is Hysitron Inc. v. MTS Systems Corp., case number 07-cv-01533, in the U.S. District Court for the District of Minnesota.
