The litigation, in which Color Kinetics alleges TIR has infringed certain patents in the US, has been ongoing since 2003, but had been somewhat overshadowed by separate litigation involving CK and Super Vision International (this has now been resolved – see news item).
As part of the litigation, TIR had sought a ruling of inequitable conduct by Color Kinetics during prosecution of its patents before the United States Patent and Trademark Office.
Last week, the United States District Court for the District of Massachusetts issued a decision that the evidence supporting inequitable conduct was not sufficient to meet the high burden of proof required for this cause of action.
TIR is keen to stress that the decision does not affect TIR's arguments concerning invalidity and non-infringement. The litigation against Color Kinetics is at the expert discovery phase, having completed the factual discovery stage.
The decision also does not affect TIR's intellectual property portfolio, which is not involved in the case and includes ten patents and over 145 patents pending.
TIR's financial results show that the company spent CAN$1.6 million on the litigation during the final calendar quarter of 2006.
Leonard Hordyk, CEO of TIR Systems, says that TIR remains focused on presenting the substantial body of evidence that the company has assembled that "demonstrates clear invalidity of Color Kinetics’ patents and the fact that TIR does not infringe them."
"We had hoped this decision would provide an early resolution to what we believe will be a successful conclusion to this litigation," said Hordyk. "We remain confident a jury will find the suit brought against TIR to be merely an attempt to stifle fair competition from TIR’s leading technology and innovative products."
During the final calendar quarter of 2006, TIR reported revenue of CAN$2.97 million, down from $4.1 million in the year-ago quarter. The company's net loss grew to $4.86 million from 3.72 million one year ago.