Jury Rules Against Itron in Patent Litigation

A jury in Minneapolis has returned a verdict against Itron, Inc., and has found that Itron's manual entry handheld meter reading devices infringed a patent owned by Ralph Benghiat, an individual.

The jury awarded Benghiat damages in an amount just under 8 million dollars. The patent litigation which began in March 1999 was tried in the United States District Court for the District of Minnesota (Civil Case No. 99-cv-501).

The jury also determined that Itron's infringement was willful. As such, Benghiat may ask the court to triple the damages award and reimburse Mr. Benghiat for his reasonable attorney's fees. At this time Itron does not know whether Benghiat will ask the court for enhanced damages or whether he will ask the court to enjoin future sales of infringing devices until his patent expires in July 2005. However, in deciding whether to grant an injunction, the court will take into account the fact that Benghiat does not make or sell the patented invention, does not compete with Itron and the impact on Itron's customers.

Itron continues to believe that its products do not infringe the Benghiat patent and has been so advised by its legal counsel. Any appeal of the jury's decision must be made to the Federal Circuit Court of Appeals in Washington D.C. There can be no assurance, however, that Itron would prevail on appeal.

"We are stunned by the jury's determination of infringement and especially in its finding of willful infringement, particularly since Mr. Benghiat did not bring his patent to our attention until ten years after it issued," commented LeRoy Nosbaum, Itron chairman and CEO. "Itron conducts its business in accordance with high ethical standards and, as a result we do not believe the facts support a finding of any infringement, much less willful infringement." Nosbaum commented that the infringement issue does not affect any customers using Itron's handheld meter reading devices or any of its other products.

"If we appeal the jury decision and do not prevail, we expect to be in a financial position to absorb the jury's award without a material adverse effect on our long-term results," Nosbaum said.

Itron, Inc.

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