Garmin To Seek Review Of ITC's Decision To Impose $37M Fine
Zacks Investment Research | May 29, 2017 10:07PM ET
Garmin Ltd.’s (NASDAQ:GRMN) Garmin International Inc. will seek a review of the International Trade Commission’s (ITC) decision to impose a fine of $37 million for an alleged patent violation.
Last Friday, an Administrative Law Judge (ALJ) at the ITC made an initial determination per which Garmin’s sale of certain DownVü sonar products violated ITC’s Dec 2015 orders. The final determination is expected to be issued in August this year.
Case History
The legal confrontation dates back to Jun 2014 when Navico had filed a complaint with ITC alleging Garmin of patent infringements. Specifically, Navico complained that Garmin’s DownVu scanning sonar products were "too similar to at least one patented aspect" of its marine technology.
The final determination issued by the ITC in Dec 2015 went against Garmin. ITC stopped Garmin from importing, selling, advertising and helping distributors or retailers in selling the infringed DownVu products.
Should this Concern Investors?
Litigations have become a part and parcel of the technology industry where so many closely related technologies are at play and possibilities of patent infringements are high. For a company embroiled in patent disputes, this could be a huge drain on resources coupled with a bad name. Therefore, investors need to keep an eye on legal issues such as these.
As far as Garmin is concerned, we don’t see any negative impact on the company’s profitability at least over the short term. Management too has stated that the determination will neither hamper functionality of ClearVü sonar technology in its products nor will it affect sales to customers or dealers.
In the last reported quarter, the marine segment (includes sonar products) increased 54.8% sequentially and 26% year over year. (See more: Zacks Investment Research
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