The stakes are rising for Terex Corp. and other manufacturers as it soldiers on to defend an important patent-infringement case relating to its line of Powerscreen-brand equipment.
A judge in a federal court in New York City on Dec. 9 awarded $31.6 million to Metso Minerals Inc., affirming a jury decision last year and doubling the jury's original award damages of nearly $16 million.
"All of Terex's motions to overturn the jury verdict were denied," says Michael Stuart, a New York City-based attorney at Cozen O'Connor, Philadelphia, which represents Metso. "We filed a motion saying we should get enhanced damages because of their willful infringement." Stuart says the final bill on the case could rise to $50 million.
The current decision says that Terex's "motivation to infringe was not malicious, but was due to competitive reasons." Metso's patent in question, U.S. Patent 5,577,618, describes a mobile crusher whose conveyors fold up for convenient transport. The patent, which Metso Mineral's parent company, Finland-based Metso Corp., owns, was granted in 1996. The court ruled that Terex violated this patent starting in 2000. Damages were awarded from 2000 to 2007, though Metso believes Terex continues to infringe.
Terex says the case is without merit and plans to appeal. "We don't think the law or the facts were correctly applied to the jury decision," says Tom Gelston, a spokesman for Westport, Conn.-based Terex. "We believe strongly that we will win on appeal."
According to legal experts, the case could be a coin toss. Terex plans to take the case in front of the U.S. Court of Appeals for the Federal Circuit, which hears all federal patent appeals. On average, the Federal Circuit overturns half of these cases.
"Neither of us is booking a liability or gain before a decision is reached," Gelston says. Stuart says Metso is "confident" the appellate court will uphold the ruling.
Metso also plans to sue other competitors: Extec and Fintec—owned by Sandvik—as well as Keestrac, another supplier of mobile crushers.
"They are next on the list," he says.
The current case involves more than 1,200 Terex machines, such as Powerscreen model Nos. 1400, 1700, 1800, 2100, 2400 and H5163. Each costs between $150,000 and $500,000. The case only affects machines imported into the U.S.