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Argus Analyzers, Midtronics Spar Over Court Ruling, Expired Patent

We have an update on a story we reported in the Sept. 12 issue of Service Executive titled “Patent Infringement Ruling In Favor Of Midtronics Upheld On Appeal.” At the time, we had not received comments from one of the other parties in this suit, Argus Analyzers.

Days after our story was published, we received a statement from Argus. We feel that it presents new information and warrants a follow-up report on our part.

Below is what we reported in the Sept. 12 story …

The U.S. appellate court has upheld a lower court’s ruling from 2011 that Argus Analyzers and BP Power sold products containing electronic battery testing technology infringing on patents held by Midtronics. The original complaint was filed six years ago. It was argued that BP Power, a Taiwanese company, developed the infringing products, and Argus imported and sold them in the United States.

In August 2011, U.S. Judge Milton Shadur of the Northern Illinois District ruled in Midtronics’ favor, ordering the defendants to stop making, importing, using and selling a number of their products, including AA350, AA400, AA500, AA500P and AA550P battery testers. Shadur also ordered the defendants to pay attorney fees and expenses.

Argus and BP Power appealed Shadur’s ruling in 2011. The U.S. Court of Appeals for the Federal Circuit in August 2012 unanimously affirmed Shadur’s ruling, and none of the relief sought in the appeal was granted. No opinion accompanied the judgment.

“The court’s decision definitively validates one of our foundational patents and the strength of our intellectual property portfolio,” Steve McShane, president and CEO of Midtronics, said in a statement. “Midtronics will vigorously defend our innovative technologies as we continue to invest in and advance battery management.”

 As of press time, we had not received a formal statement from Argus in response to the appellate court’s decision.

Here is what Argus sent Service Executive on Sept. 18 (emphasis added by us) …

The Federal Circuit Court of Appeals recently affirmed the lower court’s decision in a patent dispute that has been ongoing between Argus Analyzers and Midtronics since 2006. This decision concerns a now expired patent that Midtronics no longer has rights to enforce. Earlier in the litigation, Midronics dropped its claims against Argus as to another expired patent.

“We have fought long and hard on behalf of our customers to bring truly technically advanced, high value products into a market long dominated by a single company with dominant market share who has demonstrated a history of aggressively suing new competitors with the profits from 30 year old technology” commented Andrew Kallfelz, President of Argus Analyzers. “Fortunately the outcome of this case has no impact on our customers because the products deemed to infringe were replaced by the non-infringing and state of the art AA360/1000 series products almost two years ago and, most importantly, because all of the Midtronics patents involved in this case have expired and can no longer be enforced against anyone. Our decision in 2006 not to license our cutting edge and patented technology to Midtronics despite its threats of litigation means that we emerge from this litigation with the ability to deliver technologically advanced products at an excellent value to our loyal customers.

“While Midtronics trumpets a decision on expired patents, the practical reality is that while these foundational Midtronics patents on AC conductance are now entirely in the public domain, the patents that drive the unmatched accuracy, speed, and cost effectiveness of Argus’ products remain valid and enforceable. Argus will continue to leverage the truly innovative and highly accurate and patented LPR test technology as well as other cutting edge patented technologies to bring less expensive and highly valued solutions to battery industry customers globally.”

Kallfelz concluded, “We are very thankful to all of our customers in the USA and globally who continue to encourage us to deliver new and cost effective advanced solutions.”

Midtronics was given an opportunity to respond to Argus’ claims.

The following statement is attributed to Steve McShane, the CEO and founder of Midtronics (emphasis added by us) …

 “This suit was originally filed in July 2006. The patent in question expired on May 1, 2012 — between the time the original decision was handed down in August 2011 and when that decision was upheld on appeal in August 2012. That does not negate the original actions on the part of Argus/BPPower. Both the U.S. District Court and Federal Circuit Court of Appeals found that Argus willfully infringed patented Midtronics technology, meaning that Argus was not only aware of our patent rights, but chose to deliberately ignore them.

“As part of the judgment and based on the court’s findings regarding “defendants’ willful infringement and recklessness of their litigation conduct,” Argus and BPPower have been ordered by the court to pay Midtronics’ legal fees and other litigation costs arising from the original case and its appeal, which now total more than $1.2 million.

“The Argus statement dated September 11, 2012 misrepresents the findings of the courts and the facts of this case. The Argus press release references a BPPower patent that Argus claims to utilize in their products. Midtronics has never shown any interest in that patent and it was never an issue in this case.

“Midtronics currently holds more than 100 active patents in battery analysis, charging, and management technology that the company will continue to vigorously defend against infringement when warranted.”

Editor’s Note …

We make no judgment regarding the veracity of either company’s claims. That’s for legal professionals to determine (if necessary), and we certainly are not experts on the law. We do feel that Argus makes a bold argument, as does Midtronics, and both companies should be given a venue in which to be heard.

We encourage you to add your comments below concerning this article.

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