TODAY'S PAPER
Overcast 52° Good Evening
Overcast 52° Good Evening
Business

Tiny Andrea Electronics sues Apple for patent infringement

Douglas Andrea, chairman and chief executive of Andrea

Douglas Andrea, chairman and chief executive of Andrea Electronics Corp., is seeking an injunction against Apple in a patent infringement case. Photo Credit: Andrea Electronics Corp.

Bohemia-based Andrea Electronics Corp., a company with a stock market capitalization of about $5 million, is taking on Apple Inc., the most valuable public company in the world, in a patent infringement case.

Andrea Electronics sought an injunction Monday to stop Apple, based in Cupertino, California, from importing into the United States iPhones, iPads and laptops that infringe on its noise cancellation technology patent No. 6,363,345.

The trial before an administrative law judge at the U.S. International Trade Commission in Washington, D.C., is expected to take a week. A ruling may not be issued for several months.

Apple, with a stock market capitalization of more than $800 billion, did not respond to requests for comment. The company sold 41 million iPhones in the third quarter ended July 1.

The original complaint, filed in September 2016, also named Korean electronics giant Samsung Electronics Co. Ltd. and its American unit, Samsung Electronics America Inc. in Ridgefield Park, New Jersey. But Andrea Electronics recently reached a settlement with that company and is working to exclude them from the ITC case, said Goutam Patnaik, a partner at Washington-based Pepper Hamilton LLP, which represents Andrea Electronics.

Andrea Electronics, an 83-year-old company now run by the grandson of its Italian immigrant founder, Frank Andrea, makes digital microphones and noise-reduction software.

The company was an early producer of radios in the 1930s and televisions in the 1950s. In the 1970s and ’80s, Andrea Electronics supplied audio intercom equipment for aircraft.

Chairman and chief executive Douglas Andrea said the company developed noise cancellation technology in the early 2000s for microphones and licensed its software to personal computer manufacturers such as Asus, Dell and Hewlett-Packard.

In 2015, Andrea Electronics had revenue of $13.2 million, $12.1 million of which was related to patent licenses. But $9.2 million of that was nonrecurring. In 2016 revenue shrank to $3.6 million, $2.9 million of which was related to patent licenses.

Shares of Andrea rose 3 cents, or almost 50 percent, to close at 8 cents Monday. They are up 40 percent in the past 12 months.

Andrea said the ubiquity of smartphones and devices like Amazon’s Echo speaker have made noise cancellation more important.

“There’s a whole new third wave of voice-enabled products,” he said. “Noise reduction is important to enhancing the performance.”

A parallel patent infringement case that Andrea Electronics filed in September 2016 against Apple in federal court has been stayed pending resolution of the ITC case, Patnaik said.

Andrea said small companies face daunting obstacles when they try to press intellectual property claims against companies like Apple.

“It’s getting harder for small companies to enforce their patent rights,” he said. “The cost and amount of effort I have to put into working with Pepper Hamilton . . . takes a lot of time away from my day job.”

But Gregory Dolin, an associate professor at the University of Baltimore School of Law, said the ITC format offers smaller companies advantages over patent infringement lawsuits in federal court.

The ITC limits pretrial procedures, whose costs can “exhaust” the resources of small companies, Dolin said. Further, the ITC’s power to ban the import of products that infringe patents is a “big stick” that can bring even the largest companies to the negotiating table “pretty quickly.”

More news

Sorry to interrupt...

Your first 5 are free

Access to Newsday is free for Optimum customers.

Please enjoy 5 complimentary views to articles, photos, and videos during the next 30 days.

LOGIN SUBSCRIBE