boston.com on Lemelson
Three weeks after Cognex filed suit, Hosier, an accomplished pilot, flew one his private jets to New York City, for a meeting at the Fish & Neave law firm.
Inside the skyscraper, the parties gathered in a narrow conference room overlooking the city. Hosier, who came to the meeting with one of his lawyers, sat at the long table with his back to the window.
This was the first time Hosier had laid eyes on the garrulous Shillman, an ebullient man, prone to jumping, fidgeting and gesticulating when illustrating points. His excitability masks a deep intelligence -- he earned his doctorate in machine vision and artificial intelligence from MIT.
Hosier, on the other hand, is staid and very fit from his time spent skiing on the slopes near his Aspen mountaintop home. He is deliberate. His words are calculated and delivered carefully. He's a lawyer's lawyer.
"A brilliant but evil genius," according to Shillman.
The meeting turned confrontational almost immediately. Voices were raised and expletives detonated.
Hosier was perplexed.
Why was Cognex suing the Nevada-based, for-profit foundation that was created in 1993 to license Lemelson's patents? He had never gone after Cognex, only its clients. The companies that made the technology were not worth suing -- their revenues too small. The companies that wielded it, however, had much deeper pockets.
If Cognex lost the case, he could bankrupt it. Cognex had more to lose than gain by taking on the Lemelson partnership.
"Nobody rational would have made the decision," Hosier said. "I think the man is certifiably insane."
Shillman explained his demands. Hosier had to stop asking for royalties from its customers, and put $30 million in escrow so Cognex could protect itself against liability claims that its clients were threatening.
Nobody gave Hosier ultimatums. It was like the mouse taunting the cat.
Hosier's face reddened. Later, he would say he considered reaching across the table, grabbing Shillman by the throat and telling him, "We're going to destroy you."
Instead of throttling Shillman, Hosier walked out.
In March 2000, U.S. District Judge Philip Pro in Las Vegas consolidated the Cognex lawsuit with one filed by Symbol Technologies and six other manufacturers of bar code technology, another putative Lemelson invention that had inspired many lawsuits.
The high stakes court battle to decide Lemelson's legacy would be played out not far from the gambling casinos of Las Vegas.
Hosier said it wasn't about the money. He was protecting Lemelson's name.
Cognex said it was fighting for something else.
"Everybody felt pressure," said Bill Silver, Cognex's chief of technology. "Everybody wanted to win. (Lemelson's) legacy was on the line, and Cognex's very existence was on the line."
There would be no jury. The decision was left in the hands of Judge Pro.
The trial came down to the numbing testimony of 20 witnesses, more than 1 million legal documents and a staggering 1,300 exhibits. Over 27 days, the two sides hammered each other.
More than a year would pass before Pro issued his decision, and when he did, it sent shock waves throughout the patent world.
Lemelson -- and the for-profit partnership that carried on his business -- lost. Resoundingly.
The court found that 14 critical patent claims by Lemelson were unenforceable under a rare defense called prosecution laches -- an unreasonable delay or negligence in pursuing a right.
The judge also said the claims were invalid for lack of a written description, and a person of ordinary skill could not build the inventions using Lemelson's patents as his own experts had asserted. He added that "Symbol and Cognex products do not work like anything disclosed and claimed by Lemelson."
The companies did not demonstrate that Lemelson had "intentionally stalled" getting the patents, the judge ruled. But he did say that "decades of delay preceded the assertion of patent claims, and Lemelson has offered no adequate explanation for that delay."
Hosier was skiing in Canada when he received word he had lost. He couldn't believe it. He would later deride the judge's decision as superficial; the lawyers have since filed an appeal, and the 1st U.S Circuit Court of Appeals heard oral arguments this June.
"I think he basically said that this thing (the patent infringement claims) took too goddamn long and they made a lot of money on it," Hosier said.
For the family it was a wrenching loss. They received condolences from friends, one of whom said Lemelson must surely be turning over in his grave.
"He wasn't even around to defend himself," said his son, Rob.
But this was a great victory for Shillman. He had long since made Lemelson's defeat a personal crusade. When his alma mater, MIT, accepted a huge Lemelson gift to endow a professorship and a $500,000 award for inventors, he vowed he would never give the school another cent.
Now, he was ecstatic. He threw a party at his office in Massachusetts, and he sent out a flurry of e-mail messages, crowing about Lemelson's defeat.
One found its way to the inventor's family.
"Your worst nightmare has just come true!" Shillman wrote. "The gravy train has come to a full stop. And, it's only a matter of time before your victims (oh, excuse me, licensees) come after you.
UPDATE. 22 July 2008-->
See The Patent Prosecution Pioneer: Intellectual Property Attorney Gerald Hosier
Forbes named Gerald "Jerry" Hosier the highest-paid U.S. attorney in 2000 based on his annual income of $40 million
from EE Times:
Now, Canadian consulting firm Chipworks Inc. is hoping to make some money off Lemelson's unpopularity, tracking down "prior art" that could limit the scope of Lemelson's patents related to semiconductors. "We're trying to build a case that other people were doing the same thing," said Terry Ludlow, president of Chipworks (Ottawa).
But Gerald Hosier, the attorney representing the Lemelson Foundation in its patent fights, has his doubts, given the amount of money that's already gone into contesting Lemelson's inventions. "If there was prominent prior art, they would have found it," he said.
Moreover, the Lemelson story might be winding down. Ever since the Big Three automakers settled on the use of certain Lemelson patents last year, longtime holdouts have begun accepting Lemelson's licensing terms at the rate of one company per business day, Hosier said.
On Lemelson's death, from USAToday:
As death approached, he believed his place in history had been secured, thanks to his most spectacular inventions: machine vision and the bar code scanner, technology that has dramatically altered the way in which we live.
"He was a simple man," said his Houston oncologist, Dr. Giora Mavligit. "A mensch."
But to his many detractors, Lemelson was something else.
They claim Lemelson's patents were in fact worthless. Lemelson, they say, was one of the great frauds of the 20th century.
Critics charge that for decades Lemelson manipulated the U.S. Patent Office. They accuse him of exploiting loopholes that forced 979 companies — including Ford, Dell, Boeing, General Electric, Mitsubishi and Motorola — to pay $1.5 billion in licensing fees.
"Anything he claims to have invented, he didn't. He's a science fiction writer," said Robert Shillman, founder, chairman and chief executive at Cognex Corp., the world's largest maker of machine vision products and one of Lemelson's most truculent opponents.