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Struggling to See Eye to Eye

A David-and-Goliath dispute between two iris-recognition companies heads for a showdownJAMESBURG

AS THE WORLD has become more security conscious the use of iris-recognition systems to identify individuals has zoomed into a billion-dollar business. No company has benefitted more from this development than South Korea?s giant LG Electronics, whose partnership with Iridian Technologies of Moorestown has enabled it to dominate the iris-recognition market.
But the two companies have been bitter foes in recent years in an escalating legal dispute that has threatened both sides with something like mutually assured destruction. It was not until last fall that the warring parties took their first steps toward resolving the conflict.
The big date in this David-and-Goliath struggle will be this Thursday, when both companies are to appear in federal court in Newark for a settlement conference. Yet there is no guarantee of a resolution. ?It?s very much an open case,? says David Johnston, vice president of marketing for the Jamesburg-based iris technology division of LG Electronics.
Use of iris recognition, a system that reads the distinct patterns of a person?s iris to confirm his or her identity in a database,
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came to the fore shortly after 9/11. The technology is being explored to enhance security at airports, government facilities and other sensitive areas.
The Iridian-LG dispute revolves around the LG-produced IrisAccess product line, the leading iris-recognition platform, which is based on Iridian technology. Iridian lays claims to the IrisAccess trademark, a brand name that Johnston says LG Electronics created. Iridian says it registered the name while the product was still in development.
At issue are licensing royalties that Iridian claims LG owes it. As the conflict heated up last year, Iridian revoked its licensing agreement, asserting that LG had breached its contract. LG, whose U.S. headquarters are in Englewood Cliffs, denied wrongdoing and sued Iridian for violating the terms of the license.
Iridian counter-sued, claiming that LG?s continued sales and development activities infringe on the Moorestown company?s intellectual property. Iridian says any customers and distributors who acquired the disputed products after August 23, 2004, could face liability for the use of unlicensed products if the court agrees that LG?s license has been legally terminated.
The risks in this battle could be particularly high for Iridian, since technology licensors generally need large companies with deep pockets to develop and commercialize products. Souring the relationship with a product developer could threaten the future of Iridian?s technology.
?If they [developers] are looking for repeat business, you don?t want to be so annoying that they never want talk to you again,? says patent attorney Anthony Venturino, a partner in the law firm of Stevens Davis Miller & Mosher in Washington, D.C.
On the other hand, LG could find it hard to secure its right to the IrisAccess name since Iridian was the first to register it. ?A common big mistake is failing to keep everything confidential before applying for a patent,? says David Gange, a patent agent and president of Altimatia, an intellectual property services firm in Pennington. Both sides thus have incentives to settle their disagreements.
E?mail to jpruth@njbiz

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