Avid wins $6 million patent suit

MARSHALL, TEXAS— A Texas jury handed AVID Identification Systems a $6-million verdict in a patent infringement case. The decision followed a six-day trial in U.S. District Court in eastern Texas against Swiss manufacturer Datamars SA and its U.S. distributor Crystal Import Corp. for willfully infringing on three U.S. patents and false advertising, the court contends.

Alfred Fabricant, the defendants' lead patent attorney, did not return DVM Newsmagazine phone calls seeking comment, but he has publicly revealed plans to ask Judge John T. Ward to set aside the jury verdict. If that fails, he promises to take the decision to the U.S. Court of Appeals in Washington.

While the $6-million award compensates AVID for damages, the jury awarded an additional $26,981 for patent infringement, opening the door for AVID to seek an injunction preventing Datamars and Crystal from selling patent-infringing scanners and chips.

AVID founder Dr. Hannis Stoddard says while legal fees are in line with the damage award's total, the verdict is "very rewarding." The judge's decision on the injunction is expected this month.

"I'm willing to take it as far as we need to take it," he says.

Appeal likely

Representatives with Datamars and Crystal failed to return interview requests by presstime. Crystal supplies more than 90 percent of its microchips and scanners to Banfield, The Pet Hospital, but officials with the nation's largest veterinary practice chain says they haven't sold the technology in question since May 2004, the same month AVID filed suit. Datamars now markets a new generation of chips and scanners, officials say.

"This judgment does not affect Banfield's microchipping program," Client Advocate Director Dr. Karen Johnson says. "There is no problem with the current chips or the scanners. They are different from what we used in 2004."

That year, a corporate battle sparked when Banfield introduced Datamars' 134.2-kHz microchips to the U.S. market, which largely operates off a 125-kHz system. The 134.2-kHz chip, based on European ISO technology with specifications that infringed on AVID's patents, is incompatible with America's 125-kHz identification standard.

Roughly 100,000 microchip scanners designed for 125-kHz chips and used throughout the U.S. shelter and veterinary populations were unable to read the ISO technology, leaving more than 20,000 implanted pets untracked and unprotected, court documents state.

Last year, a California Superior Court issued an injunction against Crystal, enjoining the company from selling or distributing 134.2-kHz microchips without a written statement noting the majority of shelter scanners couldn't read ISO tags.

Banfield, now distributing Crystal's latest universal scanner, has since resumed the sale of ISO microchips.

"We're moving forward," Johnson says. "Our new scanners read all chips, including the encrypted 125 and the ISO."