The International Trade Commission recently ruled that Garmin’s DownVu products violated Navico patents on its DownScan technology.
While Navico is cheering the result, Garmin said it intends to appeal the ruling: “Garmin intentionally designed its products to prevent infringement of Navico’s patents. We disagree with the ITC and plan to appeal the determination,” said Andrew Etkind, Garmin vice president and general counsel in a statement. (See the full statement here.)
Garmin also issued a service bulletin earlier this month disputing many of the statements made about the ruling by Navico.
Boating Industry talked to Navico CEO Leif Ottosson about the decision and what it means going forward for the category and the company. (See the full ruling here.)
Boating Industry: What is the impact of this ruling for Navico?
Ottosson: For us, the impact of this ruling has been that we have been able to show that we have defended the technology that we have. We believe it’s important for driving innovations forward. We all need to have a return on our investment in that.
Take a look at traditional sonar and compare it to DownScan sonar, those pictures sort of explain the difference. You can clearly see there how the angler will get a different experience.
We have not kept the technology to ourselves. We have licensed it to other players in the market. We offered Garmin the same, a license agreement for this, but they declined. We did advise them that they were infringing on our products, but they decided to pursue this. …
The proposed design-around that they have, we have told them that in the eyes of our lawyers, it is [still] infringing on our patent.
For Navico, it was important that we were able to uphold our intellectual property. We had invested quite a bit of money in that.
Boating Industry: Why are decisions like this important to the industry as a whole?
Ottosson: All of the actors in this market are investing quite a bit in finding new technology. There has been significant development in the last five years in all areas of marine electronics. There has been a very high pace of innovation and development.
We need to make sure that you have this protection that exists out there. However, I should also say that the biggest limitation on new technologies is that you [have to be] faster than anyone else. You constantly have to make sure that you are developing.
In the long run, there are benefits to the industry to be able to make money and continue with these innovations. It’s a matter of protecting the advancements that we have made.
Boating Industry: How do you expect this decision to affect retailers?
Ottosson: We knew that Garmin had sent a message that we didn’t think accurately reflected what is in the law. We tried to explain that in our press release by saying that from the decision made December 1, from that point on, the ITC has now established that these products – the Garmin DownVu products – are infringing on Navico’s patents. Therefore, anyone that sells these products will also be infringing on Navico’s IP. Therefore, that means that the trade now needs to make sure that they don’t sell these products. [Editor’s note: Garmin has stated they do not believe this is the case and that retailers can still sell the product.]
This was not the only case that Garmin lost. Two weeks before our ruling, the ITC also ruled that Garmin had infringed on Johnson Outdoors’ patent. There is a pattern here. These were absolutely crucial technologies in order to be a viable player in that market.
Boating Industry: What happens next for the case?
Ottosson: There is an import stop on these products – these Garmin products are made in Taiwan. There is a 60-day period … to get everything in place. There is also what is called a “presidential review” … to make sure these are not products that are absolutely crucial for the well being of the nation. These products are not classified in that way.
The ITC also did something very unique in this case. If Garmin imports the product during these two months or sells to any reseller, distributor or retailer, they are forced to put up a bond of 100 percent of the value of those products.
Damages are not awarded by the ITC. They are awarded in district court. The bond is there to make sure that the party that is infringing, that they can settle the claims from the district court state.
There is more in this case that will come out in the district court case, like how this was done. The engineer that was [working on] DownScan at Navico was actively recruited by Garmin and went over to Garmin. In this case, Garmin has been very aggressive … and based on the ruling from the ITC, stepped over the line.