Color Kinetics Inc.and Super Vision International have reached a settlement on their various patent lawsuits, ending an episode that at one time caused a rift in the LED industry.
In 2002, Orlando, Fla.-based Super Vision filed against Color Kinetics, seeking to invalidate some of its patents. Super Vision claimed that four technologies — including one pool and spa application — were produced by others well before Color Kinetics received its patents. Boston-based Color Kinetics quickly filed a countersuit for patent infringement.
The issue had the LED lighting industry up in arms. Approximately 250 producers and inventors rallied around Super Vision, forming the LED Alliance. The group accused Color Kinetics of trying to hold existing technologies captive so that it could charge licensing fees. Color Kinetics now holds 58 patents and has 170 more pending.
In 2005, a Massachusetts court issued summary judgments in favor of Color Kinetics, and ordered Super Vision to pay $1.57 million in attorneys’ fees and costs. In November 2006, the Massachusetts court permanently enjoined Super Vision from producing or selling products that were determined to have infringed Color Kinetics’ patents.
As part of the new agreement, announced in December, the companies settled on a reduced fee in lieu of the $1.57 million. Super Vision will drop its infringement claims against Color Kinetics regarding a patent known as the ’687 patent.
For its part, Color Kinetics will grant licensing rights for its entire portfolio to Super Vision, in return for which Super Vision will pay royalty fees. With this settlement, Super Vision can continue making products that had been considered an infringement. Color Kinetics will be allowed a license to the ’687 patent, free of royalty fees.
Bill Sims, Color Kinetics’ president/CEO, said that maintaining an expansive patent portfolio has always been a goal of the company. “We choose not to exclude players from the field, but rather, enable the market through an active licensing program,” he stated.
Super Vision President/CEO Mike Bauer, who inherited the lawsuits when he took his post in January, said his firm now can focus on growth. “[The lawsuits] have been what I call a legacy issue that had been costing the company a lot of money in attorneys’ fees,” he said. “My net vision and goal for the company was to get it where it had a clear future without having to be tied up in court.”
At a time when LED lighting has hit its stride, with sales jumping from $100 million to $1.4 billion between 2000 and 2005, Bauer said the companies have more important matters to address. “I think there are a lot of things that we can do, working together, to really help the LED market expand and grow vs. spending our time in the courtroom,” he said.
Looking to the future, Super Vision has sold stock in the company to raise $9 million to put toward implementing a new strategic plan.