Untitled Document
TomTom vs. Garmin
There have been a lot of reports in the press about a sprout of litigation between TomTom and Garmin, so we decided to look into it a bit further. This kind of patent litigation is expensive and you cannot guarantee that it will go your way, so it is not clear why Garmin decided to go down this route, especially keeping in mind that Kansas City Business Journal reported that "Garmin holds more than 200 patents, including several with Kao and fellow co-founder Gary Burrell listed as inventors. This is the first time Garmin, founded in 1989, has initiated a patent infringement lawsuit, Garmin spokesman Ted Gartner said. Garmin has been hit with patent infringement lawsuits itself, by electronics giant NCR Corp. in 2004 and a small California company last year. In both cases, Garmin counter-sued and ended up settling out of court for undisclosed amounts."
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When the first TomTom GO (aka "Classic") hit the shops in 2004 it was a massive blow to Garmin. Before that Garmin dominated the automotive navigation market with their StreetPilot series of satellite navigation devices retailing at approximately £900. The newcomer was almost half the price and had a clear, simple and as a consequence easy-to-use interface with better functionality (which unfortunately remains to be the case, unfortunately because if it wasn't the case I wouldn't have to use a GO for driving and Nuvi for off-roading and walking).
Garmin replied with the
StreetPilot c300 series which does have a shape similar to that of the GO Classic (they both look like a CRT computer monitor) and completely different from the previous Garmin's models. When i3 appeared on the market in autumn 2005, it seriously undermined the sales of the junior model in the GO 3/5/700 range (successor to GO Classic).
In the USA Garmin gained 6% of market share in July 2006 (from 49% in June), then gained another 8% in August. TT market share dropped 4% (from 22% to 18%). In Europe Garmin is in the second place with about 16% of the market share with TomTom at 30% in Q2 2006. Since then Garmin has been steadily losing ground to TomTom in Europe. According to Canalys in Q3 TomTom had 37.1% of the market and Garmin 11.4% (which is only 2.5% more than infinitely smaller Mio Technology, who unlike Garmin are not even selling their products through the high street shops and supermarkets).
"Wisconsin"lawsuit: Garmin Ltd. v. TomTom, Inc.; Garmin Corporation v. TomTom, Inc.
Sources:
Garmin:
- QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the quarterly period ended July 1, 2006, document Q22006_10Q [1]
- Press-release 02 November 2006 [2]
- Press-release December 23, 2006 [4]
TomTom:
- Press-release 22 December 2006 [3]
Timeline:
January 31, 2006 and February 1, 2006
These lawsuits were filed by Garmin Ltd. and Garmin Corporation against TomTom, Inc. (“TomTom”) on January 31, 2006 and February 1, 2006, respectively, in the United States District Court for the Western District of Wisconsin. The lawsuits have been consolidated. ("Wisconsin" lawsuit - SNS) [1]
April 27, 2006
On April 27, 2006, TomTom served amended answers and counterclaims on Garmin Ltd. and Garmin Corporation which allege that these companies are infringing three U.S. patents that were purchased by an affiliate of TomTom International, B.V. from Horizon Navigation, Inc. on April 21, 2006. The three patents are U.S. Patents 5,291,412, 5,550,538 and 5,922,042. The amended answers and counterclaims also add Garmin International, Inc. as a counterclaim defendant.[1]
After the Wisconsin lawsuit was filed, TomTom, which does not hold any U.S. patents for technology it developed itself, purchased three U.S. patents from Horizon Navigation, Inc. and then asserted these patents in a counterclaim in the Wisconsin lawsuit [2]
May 5, 2006
Garmin Ltd. and Garmin Corporation filed an amended complaint on May 5, 2006. The
amended complaint alleges that TomTom is infringing U.S. Patents Nos. 6,188,956 and 6,222,485 owned by
Garmin Corporation and U.S. Patents Nos. 6,901,330; 6,687,615 and 6,999,873 owned by Garmin Ltd. A claim construction hearing took place on July 28,
2006. The parties currently await the court’s claim construction order .
The trial is scheduled to commence
on February 12, 2007. Although there can be no assurance that an unfavorable outcome of this litigation
would not have a material adverse effect on our operating results, liquidity or financial position, we believe
that the counterclaims are without merit and we will vigorously defend them.
December 22, 2006
TomTom, Inc. announced today that United States District Judge Barbara B. Crabb of the Western District of Wisconsin granted summary judgment ending the year long legal battle with Garmin Corp. and Garmin LTD.
Garmin had brought this litigation against TomTom asserting 5 core patents. The decision finds that all five Garmin patents asserted against TomTom in the lawsuit are either invalid or not infringed by TomTom's popular line of navigation products.
Garmin recently filed yet another patent infringement case in Texas regarding patent number 7062378 (see the "Texas" lawsuit below - SNS ). TomTom believes that this case is also without merit and urges Garmin to focus on developing the market. [3]
December 23, 2006
Garmin Ltd. announced today that it has received a decision from the United States District Court for the Western District of Wisconsin on pending cross motions for summary judgment filed by Garmin and TomTom in their pending patent litigation. The Court's ruling gave Garmin a complete victory in its defense of TomTom's claims of infringement of three patents and left unadjudicated many of the claims filed by Garmin against TomTom ...
.... In her ruling on December 22, 2006, Judge Barbara Crabb ruled that each and every claim asserted by TomTom was not infringed by Garmin, either literally or under the doctrine of equivalents. While Judge Crabb found that certain of Garmin's claims against TomTom could not go forward, her ruling did not resolve multiple patent infringement claims asserted by Garmin against TomTom. While the ruling administratively closed the case, Garmin intends to pursue these additional unadjudicated claims. [4].
Note: it looks like TomTom has effectively won this case - SNS
"Hague" lawsuit: Garmin (Europe) Ltd., Garmin International, Inc, Garmin Corporation and Garmin Ltd. v. TomTom
International B.V.
Timeline:
June 28, 2006
The Company and the above-named subsidiaries of the Company filed a lawsuit against
TomTom International B.V. in the District Court in the Hague, the Netherlands, on June 28, 2006. The
lawsuit seeks a declaration of non-infringement of TomTom’s European Community Registered Design No.
000267968-001 (the “Registered Design”)..
July 15, 2006
TomTom responded on July 15, 2006 by filing an action for
preliminary relief in the District Court in the Hague, the Netherlands, claiming that certain models of
Garmin’s StreetPilot products infringe the Registered Design. The court has set a hearing in the preliminary
relief proceedings for October 19, 2006.
Garmin believes that none of its products infringe the Registered
Design and Garmin is prosecuting vigorously its action for a declaration of non-infringement and defending
vigorously the preliminary relief proceedings. Although there can be no assurance that an unfavorable
outcome of this litigation would not have a material adverse effect on our operating results, liquidity or
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financial position, we believe that TomTom’s preliminary relirelief claims are without merit and we intend to
vigorously defend them.
Apparently (according to The Register) "
Garmin's lawyer told the judge: "The reason why we are here is that TomTom wants revenge for the fact Garmin sued them for patent infringement." Not being a lawyer and trying to give them a wide birth whenever I see one, it is difficult to understand how it could be down to TomTom if the original lawsuit was fied two weeks previously
Note: TomTom lost this case - SNS
from The Register November 02, 2006:
"Today the Dutch judge ruled that at first glance there are clear differences between Garmin's StreetPilot c300 and c500 and TomTom's Go models. For instance, Garmin's c300 and c500 have an angular form, while TomTom's Go has a round shape. The judge included drawings to underpin his views."
(If the report in The Register is correct, then it is a very strange foundation to base the judgement on. Surely, technical notes and drawings, minutes of the meetings, presentations and so on dated prior to CEBIT 2004 and clearly showing the shape of the future product would be a much better proof than the "clear differences at first glance" - SNS)
from Garmin Press Release November 02, 2006:
Garmin Ltd. (Nasdaq: GRMN) announced that it has today received a decision of the District Court in The Hague, Netherlands denying the preliminary injunction sought by TomTom International B.V. in preliminary relief proceedings alleging infringement by Garmin of a European registered design owned by TomTom. The court also ordered TomTom to pay Garmin's 37,000 euros to cover attorney fees for defending the preliminary relief proceedings.
"London" lawsuit: Garmin (Europe) Ltd. v. TomTom International B.V.
July 17, 2006
On July 17, 2006, Garmin (Europe) Ltd. filed a lawsuit
against TomTom International B.V. in the High Court of Justice in London, England. The lawsuit seeks a
declaration that United Kingdom Patent No. GB 2400293 B (the “’293 Patent”) issued in the name of
TomTom B.V., is invalid and an order that the ‘293 patent be revoked. On July 31, 2006, TomTom B.V.
filed a defense indicating that it intended to defend this lawsuit and also filed a counterclaim alleging that
certain models of Garmin’s StreetPilot products and Garmin’s nüvi products infringe the ‘293 patent..
Garmin (Europe) Ltd. believes that none of its products infringe the ‘293 patent and that the ‘293 patent is
invalid. Garmin (Europe) Ltd. intends to prosecute vigorously its action seeking a declaration of invalidity
and revocation of the ‘293 patent and to defend vigorously TomTom’s allegation of infringement of the ‘293
patent.
Although there can be no assurance that an unfavorable outcome of this litigation would not have a
material adverse effect on our operating results, liquidity or financial position, we believe that TomTom’s
counterclaim is without merit and we intend to vigorously defend it
"Texas" lawsuit
August 23, 2006
The lawsuit, filed Aug. 23 in U.S. District Court in Marshall, Texas, alleges that the Dutch competitor is infringing on a patent that Garmin won in June. The patent is titled: "Portable navigation system and device with audible turn by turn directions." (from Kansas City Business journal)
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... according to TomTom
TomTom are not giving away quite as much as Garmin does. In their "Third Quarter Results" for the year 2006, document 2006-10-26, they say:
"Following recent coverage in the press concerning our European design infringement case we are providing a general update on the status of our litigation with Garmin.
The US litigation with Garmin which we announced last February continues. Following Garmin’s claims against us for patent infringements we counterclaimed against them for a number of patent infringements in the US. The trial is due to be heard in Wisconsin in February 2007. We are also taking action against Garmin for infringement of one of our patents in the UK and for infringement of our registered design for the GO in Europe. Garmin has also initiated proceedings in Texas against us for infringement of another of its US patents. The Texas case has not been scheduled for trial and is in its initial stages.
We continue to vigorously assert our patents and designs and to defend the litigation brought against us. We will update the market if and when there are material developments in the actions."
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