DeLorme Publishing Co., the mapping company in Yarmouth famous for its Maine Atlas and Gazetteer, finds itself in hot water with the International Trade Commission over a patent infringement case and could be facing as much as $7 million in penalties.
The patent issue involves DeLorme’s series of hand-held, satellite-enabled communication devices, marketed under the brand name inReach. The devices can send text messages from anywhere in the world regardless of cellphone reception. BriarTek, a company in Virginia, alleges that DeLorme’s inReach products infringe on its patent for a similar satellite-enabled product.
DeLorme’s inReach devices, which it sells to private individuals and to the U.S. government, are the cornerstone of the company’s expansion beyond its traditional paper and digital mapping products. This patent infringement case, as it stands, could derail the company’s plans and prevent it from selling the products. The company employs roughly 75 people in Yarmouth.
ITC EXPANDS DELORME’S EXPOSURE
The dispute over allegations of patent infringement have been unfolding since 2012. An administrative law judge with the International Trade Commission on March 7 issued a brief saying DeLorme’s importing of components used in its inReach 1.5 devices does not “directly infringe” on BriarTek’s patent, but the sale of certain products that include those components “induces (patent) infringement,” and violates a consent agreement around the manufacture of those products that DeLorme signed in April 2013.
The judge, Dee Lord, also found that the sale of another DeLorme product, the inReach SE device, does not induce infringement on the patent. Lord recommended DeLorme pay a civil penalty of $637,500, based on a daily penalty of $12,500 for each of the 51 days DeLorme was in violation of the consent agreement.
However, the commission on April 23 reversed part of Lord’s decision, expanding DeLorme’s exposure to civil penalties. It determined that DeLorme’s inReach SE devices do, in fact, induce infringement of the patent.
That decision could increase the civil penalty – owed to the U.S. government, not BriarTek – to several million dollars. The commission is asking DeLorme to supply information by April 30 on the number and value of inReach devices it has sold since April 2013 to determine the penalty.
DELORME ‘STRONGLY’ DISAGREES
John Fuisz, BriarTek’s attorney, estimates that the number of violation days will increase to 92, amounting to $1.1 million DeLorme faces in penalties. It could face more if the commission agrees with Fuisz’s request to increase the daily penalty to $75,000, which would equal a penalty of $6.9 million.
The commission found that DeLorme acted in “bad faith” when it violated the consent order.
Peter Brann, DeLorme’s attorney from Brann & Isaacson in Lewiston, was out of the country on Tuesday and unavailable for comment. He had previously told the Portland Press Herald that Lord’s decision that a product does not directly infringe on a patent, but could induce infringement, “absurd on its face.”
DeLorme, in a statement released Tuesday by another of its attorneys, Stacy Stitham of Brann & Isaacson, said the company was “deeply disappointed” and “strongly disagrees” with the commission’s decision. It said the company would pursue an appeal in federal circuit court. A message left with DeLorme’s vice president of marketing, Kim Stiver, was not returned on Tuesday afternoon.
BriarTek first filed its complaint with the International Trade Commission, which has jurisdiction over international trade matters, in August 2012 when DeLorme was manufacturing its inReach products overseas and importing them to the United States.
BriarTek accused DeLorme of infringing on a U.S. patent it received in 2011 for a “global biodirectional locator beacon and emergency communications system,” essentially an emergency monitoring system with the ability to communicate with a satellite system.
The trade commission agreed to investigate, but dropped the investigation in April 2013 after DeLorme began manufacturing its inReach products in Yarmouth and signed a consent agreement, promising not to “import into the United States, sell for importation into the United States, or sell or offer for sale within the United States after importation any two-way global satellite communication devices, system, and components” that infringe on BriarTek’s patent. The consent agreement was not an admission of guilt, said DeLorme attorneys.
But days after the commission dropped the investigation, BriarTek filed another complaint alleging that the third-party resale of DeLorme’s inReach products, the importation of foreign-manufactured components and other actions violated the consent agreement. The commission has agreed with BriarTek’s claims.
PANEL ACCUSED OF OVERSTEPPING
“DeLorme honored the letter and spirit of that (consent) agreement by manufacturing its inReach devices in the United States from that date forward, although DeLorme has never believed that it infringes any claim of the patent,” according to DeLorme. “Nonetheless, the Commission now apparently has concluded that DeLorme was not permitted under the Consent Order to use any imported parts in the domestic manufacture of its devices, despite the fact that none of those parts infringes the patent.”
DeLorme claims the commission has overstepped its authority and “essentially claimed jurisdiction over any domestically-manufactured product that is not itself produced entirely from domestically-made parts.”
“Such a position is inconsistent with the Commission’s statutory mandate to protect against foreign unfair trade practices, and incorporates an unprecedented ‘Made in USA’ standard into ITC law,” the DeLorme statement says.
“This is an aggressive expansion of Commission authority into the domain of the federal district courts, which have exclusive jurisdiction to decide domestic patent infringement claims. In so doing, the Commission is threatening serious damage to a US-based manufacturer of high-tech products, and jeopardizing good-paying jobs in Maine. This result runs counter to the goal of an agency created to protect domestic industry from unfair trade practices by foreign competitors.”
Fuisz disagreed, claiming the commission’s decision is consistent with the law.
“As the (ruling) noted, DeLorme relied on opinion of counsel that is inconsistent with plain language of the Consent Order and with legal precedent,” Fuisz said. “DeLorme’s continued confusion over the law and over a contract DeLorme voluntarily entered into is perhaps better served by seeking additional education than it is by attacking the Commission. Only DeLorme is surprised by the outcome.”
DeLorme filed a complaint in federal court in May 2013 seeking a judgment that it has not infringed on BriarTek’s patent and, further, that BriarTek’s patent is invalid. In the complaint, DeLorme’s lawyers claim BriarTek’s own satellite emergency communications device, marketed as CerberLink, can’t compete with DeLorme’s inReach devices, and that BriarTek is using the legal wrangling as “an improper attempt to shut down its lower-priced competition.” That case is still pending.
Correction: This story was updated at 12:56 p.m. on Wednesday, April 30 to clarify the timeframe of the allegations.
Whit Richardson can be reached at 791-6463 or at: