Anthony Sneed v. Niel E. Armstrong, International Rectifier Corp.
Published: Sep. 21, 2004 | Result Date: Apr. 4, 2004 | Filing Date: Jan. 1, 1900 |Case number: BC296142 Bench Decision – $204,372
Judge
Court
L.A. Superior Central
Attorneys
Plaintiff
Robert J. Spitz
(Law Office of Robert J. Spitz )
Defendant
Glenn W. Trost
(Snell & Wilmer LLP)
Experts
Plaintiff
Don Estes
(technical)
Facts
Anthony Sneed, 40s, asserted ownership of all proprietary and intellectual rights to an invention called BEST 2000, which could solve problems associated with computer errors caused by calculations involving the year 2000 (Y2K). BEST 2000 was protected by Patent No. US 6,236,992. International Rectifier Corp. (IR) was a power-semiconductor company, located in El Segundo. According to Sneed, he and IR entered into a license agreement on Oct. 26, 1997. One of IR's vice-presidents, Niel Armstrong, signed the agreement. Sneed asserted that IR agreed to pay him approximately $49,764 for each separate site at which it used BEST 2000 "in any way." Sneed contended that he fulfilled all of his duties under the agreement by delivering the BEST 2000 information to IR. Armstrong verified receipt of the documentation and told Sneed that BEST 2000 was being tested and implemented as the Y2K solution at a site in Singapore. Sneed maintained that he approved the invoice and sent it to the accounting office for payment. Sneed alleged that Armstrong subsequently informed him that BEST 2000 was helpful in solving the Y2K problem, but that IR went with a different methodology. According to Sneed, Armstrong refused to give him any information about what solution IR decided to use. Instead of declaring IR in total breach of contract, Sneed waited to see if IR used BEST 2000 at any other sites. In February 1999, Sneed allegedly discovered that IR used BEST 2000 at seven other sites, where it had IBM AS/400 computers. He therefore suspected that IR hid its implementation of BEST 2000 to avoid payment. He sued Armstrong and IR, alleging breach of contract. He claimed that the solution IR implemented was not within its prior knowledge, nor was it within the general public's knowledge. Sneed denied that another source could have provided the solution to IR. He asserted that he never consented to IR's use of BEST 2000 without payment. As to his patent, he characterized it as prima facie evidence that his invention was not in the public domain and that he was the inventor. He also argued that the agreement required IR to pay him if it used BEST 2000 in any way, even if it was within the public domain. According to Sneed, IR intentionally misinterpreted the agreement to avoid making payments. Based on the methodology used a various sites, Sneed maintained that IR used his invention at each of its seven sites. Further, at the time IR began the Y2K remediations at the various sites, the details of how to implement BEST 2000 was unknown to the general public. Sneed's method was allegedly not available in the applicable literature or other sources in 1997. IR therefore did not have sufficient information to implement the Y2K remediation without BEST 2000. Because his invention was more than merely helpful to IR, Sneed argued that IR should pay him for its use. Armstrong and IR maintained that IR's remediation technology was in the public domain, and that the agreement exempted IR from paying for information that was already public knowledge. They contended that IR did not use any previously unknown aspects of BEST 2000.
Settlement Discussions
Sneed demanded $327,000. Armstrong and IR offered $50,000.
Damages
Sneed sought $49,764 for each of the seven sites that used BEST 2000, plus any additional consequential damages, attorney fees and costs.
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