Welsh & Katz, Ltd. Helps Papst Licensing Reach $6.7 Million Settlement…

Welsh & Katz, Ltd. Helps Papst Licensing Reach $6.7 Million Settlement with Minebea Co., Ltd.
Convincing trial court victory paves way for multi-million dollar settlement and brings to close 10-year legal battle between small German-based licensing company and the Japanese multinational company, Minebea

CHICAGO– LAWFUEL – The Lawsuit Newswire – Due to Papst Licensing’s overwhelming trial court victory last August, Minebea has agreed to pay Papst Licensing a $6.7 million settlement to avoid an award of attorneys’ fees in their long-running dispute. Minebea Co., Ltd. is a multi-billion-dollar industrial company based in Tokyo, employing 40,000 people. Papst Licensing GmbH & Co. KG is a family owned company based in Germany. As part of the agreement, all claims between the parties have been dismissed with prejudice.

“This is an incredibly significant victory for our company,” states Georg Papst, founder and president of Papst Licensing, a technology licensing company based in Germany. “Since 1997, Minebea has tried to destroy our licensing program – a program which the courts have found to be operating in good faith and with good licensing practices. To bring this unpleasant chapter in our company’s life to a close is very rewarding,” he says.

The settlement was reached eight months after a major decision on the dispute was rendered by Washington, D.C. District Court Judge Paul Friedman. On August 17, 2006, Judge Friedman denied Minebea’s $500 million claim against Papst Licensing and its president, Georg Papst. The dispute arose over Papst Licensing’s patents that cover motors and hard-disk drives found in virtually all personal computers.

In his 154-page opinion, Judge Friedman overwhelmingly sided with Papst, ruling in Papst’s favor on all counts. Judge Friedman found that Papst not only operated in good faith, but also with good licensing practices (Minebea Co., Ltd., et al., v. Georg Papst, et al., 444 F.Supp.2d 68 (D.D.C. 2006)).

In related lawsuits, Papst had sued all major hard-disk drive manufacturers for patent infringement, and has now entered into significant license agreements with all but one of the manufacturers. These licensees include IBM, Seagate, Western Digital, Hitachi, Fujitsu, Toshiba, and many others.

Minebea, a supplier of motors to these manufacturers, tried to torpedo Papst’s licensing program by suing Papst on behalf of Minebea’s customers seeking an order that Papst’s licensing program was illegal, and seeking recovery from Papst of — among other things — the significant license payments Papst had received from Minebea’s customers, according to Welsh & Katz’s Jerold B. Schnayer.

Minebea had leveled a litany of misconduct charges against Papst, including charges of fraud, conversion, breach of contract, patent exhaustion, and patent misuse. On the eve of trial, Minebea dropped all fraud charges.

“At trial, we thoroughly defeated all of Minebea’s claims even though Minebea threw an army of lawyers against us and spent tens of millions of dollars on its case,” states Welsh & Katz’s Jerold B. Schnayer, Papst’s principal outside attorney responsible for the defense of the case and Papst’s licensing program. “Over the life of this case, Minebea fought every possible claim tooth and nail, but we overcame them all, and at a fraction of the cost of what Minebea spent to pursue them. Judge Friedman’s decision was so overwhelmingly in favor of Papst that Minebea needed to pay Papst $6.7 million to settle the case to avoid paying attorneys’ fees,” he explains.

During its seven-week trial in 2005, Papst Licensing also was represented by Richard W. McLaren, Jr., lead trial counsel, and Daniel R. Cherry, both principals of Welsh & Katz.

Welsh & Katz, Ltd. is a full-service intellectual property law firm known for its impressive track record of success and the breadth of its international practice. The Firm focuses on obtaining patents, trademarks and copyrights; intellectual property litigation; protecting trade secrets; product anti-counterfeiting; clearance opinions; and licensing transactions. Additional information about the firm is available at WWW.WELSHKATZ.COM.

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