ESI Subsidiary Wins Lawsuit Settlement with MVP; Parent Company Battles General Scanning

Electro Scientific Industries Inc. (Portland, OR) subsidiary Applied Intelligence Systems Inc. (AISI; Ann Arbor, MI) has settled its intellectual property lawsuit with Machine Vision Products (MVP; Ann Arbor, MI). The suit against MVP and two former AISI employees for theft of trade secrets, unfair competition and interference of business was settled with consent judgements in ESI's favor including both monetary and injunctive relief.

In December 1996, AISI sued MVP and two former AISI employees who currently work for MVP on five counts including breach of contract, unfair competition, conversion of intellectual property and trade secrets, interference with business expectancies and willful destruction of property. The case, which has been pending in the Michigan Circuit Court, County of Washtenaw, has been settled on terms satisfactory to all parties. The defendants consented to a $1 million judgement against them and to an injunction against using ESI's trade secrets.

Meanwhile, ESI's patent infringement lawsuit against General Scanning Inc. (Watertown, MA) continues (see ESI Files Patent Suit Against General Scanning ). The court granted ESI's motion for partial summary judgment that upgrade kits, sold by General Scanning for 1.3-µm laser wavelength memory repair, infringe upon the ESI patents above. The lawsuit is currently scheduled to go to trial on March 29, 1999. In papers filed with the Court, General Scanning has stated that ESI is seeking more than $20 million in damages in this case.