Tiny Firm Gets Award Doubled in Rockwell Case

Saying that Rockwell International Corp. trial witnesses “looked like liars,” a federal judge is doubling a $57-million patent infringement judgment that the high-tech giant was recently ordered to pay to a tiny Irvine company.

Celeritas Technologies, which had accused Rockwell in a federal suit of stealing technology used in computer modems, stands to collect about $115 million. The development was the latest in a string of legal victories for Celeritas, a two-employee company that received $6 million when it settled a similar suit against AT&T; Corp. in 1995.

In a hearing earlier this week in U.S. District Court in Los Angeles, Judge Edward Rafeedie chastised Rockwell in unusually harsh language and flatly rejected Rockwell’s pleas to overturn a $57-million jury award delivered last month.

“The defendant’s own witnesses who were presented here by videotape looked like liars, hedgers, and it is not surprising to me that the jury reached a verdict,” Rafeedie said.

The witnesses, Rafeedie said, “appeared to be less than candid, less than honest, appeared to be covering up.”

It was unclear which witnesses he was referring to in particular, but prominent Rockwell executives--including Dwight Decker, president of the company’s semiconductor division--were among those who testified on videotape.

Rockwell plans to appeal, spokesman Bill Blanning said.

“We obviously disagree with the judge’s characterizations,” he said. “We are extremely disappointed with the court’s ruling. We intend to appeal and are confident that the court of appeals will reverse the judgment.”

Rafeedie said he plans to enter a final judgment in which Rockwell would pay $115 million in compensatory damages, plus attorneys’ fees, to Celeritas. Federal judges have the authority to double or triple damage awards in patent infringement cases when the violation is considered willful.

“We agree with the court’s characterization of the testimony,” said Fred Lorig, a Los Angeles attorney who represented Celeritas in the case. “While we expect that Rockwell will appeal, we believe the court’s decision is well supported in the trial record.”

Celeritas executives declined to comment.

The case centered on a technology patented by Celeritas that speeds up the transmission of faxes, e-mail and other computerized data over cellular telephone networks. Celeritas presented the technology to Rockwell in 1993 after the Seal Beach-based company agreed not to disclose or use information about the technology without licensing it.

Celeritas claimed that Rockwell, which controls 70% of the world’s modem market, violated that agreement and used the technology anyway.

But Rockwell executives argued that the technology was not developed by Celeritas, that it was in the public domain and already being used by other companies, and that the patent was improperly issued.

Celeritas had “reinvented the wheel,” James O’Shaughnessy, chief intellectual property counsel for Rockwell, said in an interview several weeks ago.

But a federal jury sided with Celeritas, and Rafeedie agreed. “It appears that the intent was there from the beginning to misappropriate the technology,” he said in the court transcripts.