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Lemelson - Con Artist or Inventor?

In my humble opinion, Jerome Lemelson was a con artist ranking up there with Charles Ponzi and Bernard Madoff. 1989 was the year that Lemelson started his attempt to get control over the U.P.C. Code and Symbol. Before I discuss my reasons for believing he was not an inventor but rather a gifted con man, I must say that the Lemelson Foundation has used some of his ill gotten riches to do some good. BTW, the Lemelson Foundation is a FOR-PROFIT foundation that holds the rights to his patents.

Jerome Lemelson was born July 1923 and died October 1997. His first patent was issued in 1953 for an incremental improvement to the propeller-beanie. He “Invented” a tube through which the wearer could blow on the propeller to make it turn. Apparently that taught him how the patent office worked and before he died he owned over 558 patents, some issuing after his death.

The patents that opened my eyes to his underhanded methods are those that he claimed dealt with scanning and with barcodes. They were #5,144,421, #5,119,205, #5,128,753, # 4,969,038. Although the earliest one was filed in 1989, he asserted that they all had claims that read on all barcodes, including those invented as early as 1949..

I learned that Lemelson’s method of inventing was to read through 40 odd technical journals he subscribed to. When he saw the direction a technology was headed he would file for a patent for something he thought would be invented as time went on. The ruse was successful because working models did not have to be submitted since a change in the patent law in the late 1800’s. According to Stanley Miller, a patent examiner and supervisor from 1956 to 1998, Lemelson would submit vague “jumbo” applications of 100 pages or more. Examiners referred to him as “Black Box Jerry”. They were always rejected the first time but Lemelson using loopholes, whining, and by being relentless, he would force the examiner to just give in and grant the patent.

Under the patent laws applicable at the time anything claimed in the initial filing was protected and became the property of the applicant when issued. A quirk in the law however, allowed something called a “continuation”. During the continuation applicants were permitted to modify, amend, and add new claims to their “inventions”. Because patents under the law at that time had only a 17 year life, Lemelson would pull back his applications at the last minute, thus delaying the issuance and in reality extending the 17 year period. It also allowed him to add claims of things invented by others since his original filing. At times he delayed applications for years.

The following quote is from Nicholas Varchaver’s article “The Patent King” published in Fortune Magazine , May 14, 2001.

“ But as any savvy patent practitioner knows, his action wasn't inexplicable at all.
Consider: Lemelson first submitted some of his key technological patent applications in the mid-1950s. But thanks to all the delays--delays often triggered by Lemelson's continuations--many of them weren't issued until the '80s and '90s. By then, though, Lemelson had amended them to include real products that had come on the market--which he could claim to have invented because he had applied for the patent back in the '50s! And because the patent only took effect when it was issued, that meant that every manufacturer of the product needed to license it from the "inventor."

Using this as a threat Lemelson went to companies using products from manufacturers that he claimed were infringing on his patents and demanded that these companies pay him royalties. He seldom went to the alleged infringing manufacturers because that might lead to a patent fight…he was a smart con artist. The list was impressive with over 900 corporations including such major companies as Ford, General Motors, Hewlett-Packard, and even IBM. By the year 2001 Lemelson had extorted $1.5 billion from these marks.

It wasn’t until November 2002 that the validity of these patents were challenged in the United States District Court, District of Nevada, Las Vegas, Nevada by two very small companies, Symbol Technologies, Inc. and Cognex Corp. Their companies were being devastated because Lemelson, the con artist, was demanding exorbitant licensing fees from the customers of these two small companies. This unscrupulous tactic crippled their sales.

On Jan. 23, 2004 Judge Pro held that 14 patents relating to bar code technology held by the Lemelson Medical, Education & Research Foundation were not valid.
He ruled as follows:

Having concluded that Lemelson's patent claims are unenforceable under the equitable doctrine of prosecution laches; that the asserted patent claims as construed by the Court are not infringed by Symbol or Cognex because use of the accused products does not satisfy one or more of the limitations of each and every asserted claim; and that the claims are invalid for lack of written description and enablement even if construed in the manner urged by Lemelson,

IT IS ORDERED that JUDGMENT is hereby entered in favor of Plaintiffs Symbol Technologies, Inc., Accu-sort Systems, Inc., Intermec Technologies Corp., Metrologic Instruments, Inc., PSC Inc., Teklogix Corp. and Zebra Technologies Corp. and Cognex Corp., and against Defendant Lemelson Medical, Education & Research Foundation, Limited Partnership on Plaintiffs' Complaint for Declaratory Judgment pursuant to 28 U.S.C. § 2201(a).

PHLIP M. Pro /s/
Chief Judge
DATED: January 23, 2004

Of course, one would expect an entity as large as the Lemelson Medical, Education & Research Foundation with their unlimited resources, would immediately file an appeal, and they did.

The United States Court of Appeals for the Federal Circuit heard the case of:

SYMBOL TECHNOLOGIES, INC., ACCU-SORT SYSTEMS, INC., INTERMEC TECHNOLOGIES CORP., METROLOGIC INSTRUMENTS, INC., PSC INC., TEKLOGIX CORPORATION, ZEBRA TECHNOLOGIES CORP., COGNEX CORPORATION, and TELXON CORPORATION,
Plaintiffs-Appellees, vs:
LEMELSON MEDICAL, EDUCATION & RESEARCH FOUNDATION, LP,
Defendant-Appellant.

The case was so clear cut that the Circuit Judges MAYER, LOURIE, and BRYSON decided in favor of Judge Pro’s original decision. Circuit Judge Lorrie issued the finding September 9, 2005.

At the end of the trial the arrogant, Mr. Hosier (the lawyer for the Lemelson Foundation) made the following comments. “The judge ruled the way he did and you’ve gotta (sic) live with it and move forward with life.“ He certainly is not about to start handing out refunds to the 900 or so companies that have paid the foundation licensing fees. “These were eyes-open deals. You pay your money and you take your chances” said Mr. Hosier.

Although the much of abuse of the patent system has now been halted by changes in patent law, you and I bought the FOR-PROFIT Lemelson Foundation by paying higher prices for our automobiles, computers, anything with silicon chip in it, and in fact everything you purchase at Wal-Mart, Target, Radio Shack and many other businesses that were victimized by Lemelson. In fact we are still paying higher price due to this con.

Lemelson should not be revered as brilliant inventor but should be looked upon with disdain for being nothing more than a con man.

George J. Laurer
Inventor of the U.P.C. Barcode & Symbol