Arbitrator orders Magnetek to pay $23 million in patent dispute

Magnetek Inc. reports that an arbitrator has decided it must pay $23.4 million in damages to Ole Nilssen as a result of their long-running patent dispute and former litigation. As disclosed in the firm's SEC filings during the past seven years, Nilssen filed a lawsuit in April 1998 alleging infringement of patents pertaining to certain types of electronic ballasts previ...

06/01/2005


Magnetek Inc. reports that an arbitrator has decided it must pay $23.4 million in damages to Ole Nilssen as a result of their long-running patent dispute and former litigation.

As disclosed in the firm's SEC filings during the past seven years, Nilssen filed a lawsuit in April 1998 alleging infringement of patents pertaining to certain types of electronic ballasts previously sold by Magnetek, and sought unspecified damages and injunctive relief. The company denied that these products, which it no longer manufactures, infringed any valid patent, and filed a response asserting affirmative defenses, as well as a counterclaim for a judicial declaration that its products did not infringe Nilssen's patents, and also that the asserted patents were invalid.

In April 2003, Nilssen's lawsuit and the counterclaims were voluntarily dismissed with prejudice, and both parties agreed to submit limited issues in dispute to final and binding arbitration.

The arbitration process began on Nov. 8, 2004, and Magnetek announced that it expected a decision during its present fiscal quarter. While Magnetek says it presented what it believes are compelling defenses at arbitration, it also repeated in its filings and statements that a decision in favor of the plaintiff could have a material adverse effect on the company.

Magnetek learned May 3 that the arbitrator had awarded damages to Nilssen totaling $23.4 million. While this outcome was unexpected, the decision is final, binding, and not subject to appeal or explanation by the arbitrator. As a result, Magnetek is discussing various available options with its advisors and with Nilssen and his advisors.





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