Escaping winter and patent battles

Far from the winter cold, industry executives flocked as usual in February to Orlando, FL, for the Annual Business Conference of the Automated Imaging Association (Ann Arbor, MI, USA), held this year at the Portofino Bay Hotel.

Far from the winter cold, industry executives flocked as usual in February to Orlando, FL, for the Annual Business Conference of the Automated Imaging Association (Ann Arbor, MI, USA), held this year at the Portofino Bay Hotel. With about 160 attendees, the meeting continues to be a great networking event for worldwide manufacturers of cameras, boards, and other imaging components, along with their distributors and system integrators.

The good news is that sales should grow as the global economy recovers. But the challenge will continue to be how to add revenue, which has declined over the past few years of a "profitless recovery," according to Nello Zuech, president of Vision Systems International (Yardley, PA, USA). By his count, there were 19 significant mergers between vision companies in 2003, reflecting an industry consolidation that should continue.

Special rewards are de rigueur at any industry meeting. Savvas Chamberlain, CEO and chairman of Dalsa (Waterloo, ON, Canada), collected a well-deserved Achievement Award for Industry Leadership for having taken his company from a small consulting firm in 1980 to a global leader in imaging with more than $100 million in annual revenue.

Persistence rewarded, too

And then there was the special recognition award for Cognex (Natick, MA, USA), which drew an unusual but heartfelt standing ovation for victory in the Lemelson case. Cognex, along with Symbol Technologies (Holtsville, NY, USA) and others, had fought a long patent battle with the Lemelson Medical, Education & Research Foundation, Limited Partnership. Although the prolific inventor Jerome Lemelson died in 1997, the Partnership had collected more than $1.5 billion in license fees from the vision industry and its customers for patents covering machine vision and barcode-reading technologies. On January 23, 2004, US District Court for Nevada Judge Philip Pro ruled that the 14 patent claims by Lemelson are "invalid, unenforceable, and not infringed by Symbol or Cognex, or their customers."

Bill Silver, cofounder and chief technology officer at Cognex, told me that the legal battle-an opportunity that had been passed up by much larger companies-cost Cognex $5 million plus endless hours in Reno hotel rooms preparing the case. "Lemelson had a brilliant strategy of never making the cost of settlement [for licensing] more than companies were willing to pay," says Silver. "But they didn't expect to run into 'Dr. Bob' Shillman [chairman and CEO of Cognex], who felt it was just wrong and was crazy enough to work 14 years on the case, even if it didn't make business sense."

The vision industry, and especially its customers who paid much of the licensing penalty, owe Cognex and Symbol Technologies deep thanks for removing the dual burdens of cost and potential liability and for opening the door to further innovations.

W. Conard Holton
Editor in Chief
cholton@pennwell.com

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