It's
rare when an inventor sues a potential customer. It's
rarer still when the customer has a market capitalization
of billions and the inventor doesn't even qualify as
a mid-cap company. Yet, none of that stopped Golight,
Inc. from suing Wal-Mart for patent infringement.
Golight
makes search lights. The company got its start when
Gerald Gohl got tired of using hand held search lights
in Nebraska blizzards to check his cattle. He dreamed
up a light that mounted on the outside of a truck and
could be controlled from the inside. The first version
was controlled by an electrical cable. A later version
was controlled by a wireless remote. Both versions were
patented.
The
lights sell through a variety of retailers, including
Cabella's. It's actually a clever invention. In terms
of a scientific breakthrough, the Golight comes up…
well, light. It's not a leap in technology. But in terms
of a sellable item, especially the wireless light, it
works. Imagine sitting around playing with the equivalent
of a TV remote to operate the light on your truck. Hey,
you can even spotlight deer! Talk about easy hunting…
which is why spotlighting is illegal by the way. Let's
face it, the light is a “guy gadget”, especially when
it's painted in camo.
Wal-Mart
liked the Golight a lot. It approached Golight about
buying the light. The company said no and kept selling
its light to other retailers.
Can
you imagine telling a willing Wal-Mart no? Many inventors
dream about inventing a new product and selling to Wal-Mart.
The volume that Wal-Mart promises is huge. It's immense.
It's actually blinding. There's another side of selling
to a discount retailer that the Golight case illuminates.
Wal-Mart is big and plays hard. It puts constant downward
pressure on the prices its suppliers charge. Much of
what is sold in the stores comes from overseas, with
China a main source. If your business is importing goods
for sale, Wal-Mart wants to know the identity of your
factory. With the Chinese, there is no loyalty, so the
threat is that Wal-Mart will bypass you and buy directly
from the factory.
Rebuffed,
Wal-Mart started buying a wireless light from someone
else. The light was styled a “low-end copy”, probably
from an off-shore supplier. The Wal-Mart light was identical
to the wireless Golight, with the exception of range
of movement. Both lights can move vertically up and
down. Both lights can also move horizontally. The difference
is that the Golight can move horizontally in a complete
360 degree circle, while the Wal-Mart light could only
move between 340-351 degrees. In other words, the Wal-Mart
light could move just a tad shy of a full circle. A
plastic stop restricted the range of movement.
You
can guess who wins from the court's reference to the
stop piece as “suspicious”. Wal-Mart's defense hinged
on the fact that the patent showed a light that rotated
a full 360 degrees and that an earlier, prior patent
by another inventor showed a windshield mounted light
that could move both vertically and horizontally. The
prior light had a smaller range of motion. Golight won
a judgment of $460,000, plus its attorneys' fees.
Golight's
wireless light is a high end product, selling for over
$200 at retail. Golight's damages amounted to a royalty
of $31.80 for each infringing Wal-Mart light sold. Wal-Mart
said that figure far exceeded its profit on the light,
which was $8.00. This shows just how much cheaper the
Wal-Mart light was than the Golight. Any wonder why
little Golight took on bigger Wal-Mart?
Attorneys'
fees were awarded because Wal-Mart's infringement was
willful. The two companies had previously clashed on
another product, probably on the cable version. Wal-Mart
relied on assurances from its supplier that the wireless
light didn't infringe. In most cases, retailers don't
dictate many details of the products they sell. But,
if a retailer has the clout to work with a manufacturer
on a low-end product, its risk of liability increases
accordingly.
From
a customer's point of view, it's hard not to like Wal-Mart
because its prices are hard to beat. Designing around
patents is an age-old practice. The law favors designing
around patents because it fosters competition and tends
to advance technology. True, the Golight is not a scientific
breakthrough, but maybe it will trigger other inventions.
The
dark shadow of patent law descended on Wal-Mart because
its light was only a tad different than the patented
light. It was closer to the patented light than to the
older windshield light. But then, if Wal-Mart had something
closer to the windshield light, the one that couldn't
move as much, Wal-Mart's light wouldn't have sold as
well.
Originally
Published in the Fort Worth Businss Press
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