Hewlett-Packard sues Gateway

Rachel Konrad

Friday, March 26, 2004 | 9:13 a.m.

SAN JOSE, Calif. -- Hewlett-Packard Co. filed a patent infringement lawsuit Thursday against Gateway Inc., alleging its rival refused to pay licensing fees on six HP patented designs.

Alleged culprits included laptop hinges, keyboards that require passwords -- even the cursor that points to icons on a computer's video display.

According to HP attorneys who filed in San Diego federal court, Poway, Calif.-based Gateway paid licensing fees from 1994 to 1999 to Compaq Computer Corp., which HP acquired in 2001. After the first licensing agreement expired in 1999, HP attorneys say, Gateway kept using patented designs but did not pay for them.

Some of the patent infringement claims in HP's lawsuit involve eMachines Inc., which Gateway acquired March 11.

"We would be happy to have Gateway take a license right away and put all this behind us -- we'd love that to be the outcome," said Joe Beyers, vice president of the 50-person intellectual property licensing division at Palo Alto, Calif.-based HP. "But given that we were in this situation, we're showing that HP is serious about adequately protecting and getting fair value for our inventions and intellectual property."

Gateway spokesman Bob Sherbin said his company would fight the infringement allegations in court.

"The fact is both companies are in possession of significant patent rights in the area of computer technology," Sherbin said. "It's premature for them not to take this into consideration before proceeding with a lawsuit."

HP, which was suing for attorneys fees and back payment on licensing fees, would not say how much Gateway allegedly owed, but one analyst said an award could be in the tens of millions of dollars. HP is asking the court to award triple damages, "in view of the reckless, willful and deliberate nature of Gateway's infringement," according to court records.