NBAA Convention News

TAWS maker files counterclaim against Honeywell's lawsuit

 - June 30, 2008, 8:19 AM

Terrain awareness and warning system (TAWS) manufacturers being sued for patent infringement by Honeywell have started to fight back. On Monday, Universal Avionics Systems Corp. filed a counterclaim in the U.S. District Court in Delaware alleging that Honeywell is “attempting to monopolize” the TAWS market with its patent lawsuit filed last spring.

The Tucson, Ariz.-based avionics maker’s attorneys have also alleged that Honeywell “has interfered with Universal’s business expectancies and has engaged in unfair competition under state law.” They are seeking treble damages against Honeywell under the Sherman Antitrust Act, as well as unspecified compensatory and punitive damages.

According to Brett Pogany, director of investment banking with financial advisors First Equity in Westport, Conn., this is the fourth counterclaim to have been filed against Honeywell–the others being lodged by Sandel Avionics, Goodrich Corp. and Aviation Communications & Surveillance Systems (ACSS–the joint venture between L3 Communications and Thales Avionics). All have been sued by Honeywell for alleged violations of patents related to Honeywell’s Enhanced Ground Proximity Warning System (EGPWS)–but so far, Universal is the only litigant publicly to announce a counterclaim.

Sandel product marketing director Gregory Wilson told NBAA Convention News that the Vista, Calif. firm will make no public comment on the case. A spokeswoman for Charlotte, N.C.-based Goodrich said that its lawyers have advised it not to “comment on pending litigation.”

An ACSS spokesman said that “we will vigorously defend ourselves from these groundless accusations that are without merit.” The Phoenix, Ariz. company was sued by Honeywell on August 6–almost three months after the initial court action. Its T2CAS system combines both traffic and terrain avoidance capability (i.e., TAWS and TCAS) and is claimed by ACSS to be more advanced than the rival TAWS systems from Honeywell and the other competitors.

Honeywell’s lawsuit filed in the Delaware court on May 10 alleged that Universal and the other TAWS makers infringed five of its patents. The four companies are the main competitors to EGPWS, the TAWS product introduced by AlliedSignal in 1996, prior to its 1999 merger with Honeywell.

A Honeywell attorney said that the five patents (each 165 to 180 pages long) cover a myriad of detail that would be exemplified by the mathematical algorithms that enable EGPWS to calculate the distance between aircraft and terrain and the precise evasive action that pilots need to take to avoid collision. “People are welcome to compete, but they can’t use our intellectual property,” he said.

Accusation of Bad Faith

In a statement issued here at the NBAA show yesterday afternoon, Universal accused Honeywell of taking legal action, “in bad faith, knowing that its patents are invalid.” It also slammed the avionics and engines giant for engaging in “sham lobbying of the Federal Aviation Administration and European Commission, in that Honeywell failed to disclose to those agencies either the existence of its pending patents and/or its intent to enforce them at the time those agencies were making critical decisions affecting the TAWS market.” Universal concluded that Honeywell has been “intimidating” its customers and “engaging in patent misuse.”

In a statement issued yesterday afternoon, Honeywell countered that the assertions in Universal’s case are “merely baseless attempts to evade the central issues in our patent infringement lawsuit.” It continued that: “Honeywell thoroughly investigated the validity of each of the five patents cited in our lawsuit and is confident they are valid. We have also evaluated Universal’s product and feel similarly confident that those products infringe our patents. Honeywell Aerospace has spent millions of dollars to develop its EGPWS, which has saved thousands of lives since 1996. The patents at issue in Honeywell’s lawsuit protect proprietary technology from that investment.”

First Equity’s Pogany publicly endorsed concerns expressed privately by companies embroiled in the case to NBAA Convention News’s sister publication Aviation International News, saying that Honeywell is using the legal action as a marketing tactic to scupper its competitors in the TAWS market. He predicted that Honeywell will “drag out” the case through the TAWS installation mandate in March 2005 in a bid to deter operators from ordering its competitor’s products. Honeywell’s lawsuit is seeking an injunction forcing its rivals to take their TAWS off the market.

Senior executives at firms being sued by Honeywell have made the same charge, but have felt obligated to speak on a “not for attribution” basis on advice from their attorneys. Several company representatives indignantly told NBAA Convention News here yesterday that once their legal defense cases are fully prepared, they intend to launch hostile public relations counter-offensives against Honeywell in the marketplace.

U.S. antitrust officials appointed First Equity as trustee to oversee Honeywell’s merger with AlliedSignal. This was the first time a private company had been given this role and its main responsibility was to handle the divestiture of competing subsidiary operations within the two companies, including Honeywell’s TCAS 2000 product, which was bought by L-3. First Equity now has connections with Sandel.

The European Commission (EC) also had to give its blessing to the Honeywell/AlliedSignal merger and only did so on condition that sufficient competition was preserved in the avionics market. It specifically cited TAWS and EGPWS products in its list of requirements. At the time, Honeywell lawyers told the EC that its EGPWS would have no fewer than five competitors, and yet now their lawsuit is seeking an injunction forcing its rivals to take their TAWS off the market.