by Zach Javdan
July 25, 2014
Bose Corporation filed a federal patent infringement lawsuit in U.S. District Court in Delaware, on Friday, against Beats Electronics LLC and Beats Electronics International Limited. The lawsuit relates to noise-cancelling technology Bose Corporation uses in its headphones.
Bose corporation, founded in the 1960s by then MIT graduate student Amar G. Bose, started off as a privately held Massachusetts corporation headquartered in Framingham Massachusetts. The corporation was eventually dissolved and re-incorporated in Delaware.
Creation of Bose Corporation was inspired by his disappointment in the quality of speakers at the time, which he felt failed to sufficiently emulate a live performance.
Bose’s corporation was initially capitalized by angel investors which included his MIT professor. Because of Bose’s desire to focus on product development, rather than large financial gains, his corporation never went public. The company now boasts almost 10,000 employees worldwide.
A few years ago, Bose donated most of his company, in the form of non-voting shares to MIT “in order to sustain and advance MIT’s education and research mission.” Bose is famous for its speaker and auto sound systems. It’s noise-cancelling headsets have received high praise in the industry.
The lawsuit revolves around the active noise reduction (ANR) technology featured in Bose’s noise cancelling headphones which include Bose QuietComfort 20 and QuietComfort 20i. The suit can later be expanded to cover other items in the future.
According to Bose, the noise-cancelling technology at issue has been in development for almost 40 years. The technology implements sound waves to cancel out unwanted noise.
Five different U.S. patents, relating to noise-cancellation, are referenced in the lawsuit:
No. 6,717,537 – “Method and apparatus for minimizing latency in digital signal processing systems”
No. 8,073,150 – “Dynamically configurable ANR signal processing topology”
No. 8,073,151 – “Dynamically configurable ANR filter block topology”
No. 8,054,992 – “High frequency compensating”
No. 8,345,888 – “Digital high frequency phase compensation”
Damages and Injunctive Relief
Bose is seeking unspecified damages from Beats. Bose claims a loss of sales and profits and is seeking an injunction to prevent further infringement of its patents.
Bose has also filed a complaint with the International Trade Commission, space ITC, space requesting the Commission to ban the sale and importation of certain beats headphones, from China to the United States, on grounds that they infringe on their noise cancellation patents. The lawsuit will likely be placed on hold while the ITC complaint is pending.
Bose released a statement emphasizing their decades of investment in the research, development and engineering of the technologies that are the subject of the lawsuit and complaint. They also emphasized their vigilance in connection with protecting their consumers and the patents they hold. This is consistent with their previous history of aggressively protecting their intellectual property and brand. For example, in 2008, Bose settled a similar case against Phitek Systems, Inc., a corporation based out of New Zealand and California.
Timing and Beats Acquisition By Apple
The timing of the lawsuit and complaint are very interesting considering they were commenced after Beats agreed to be acquired by Apple for $3 billion in cash and stock, in May. The breakdown of the agreed purchase price includes $2.6 billion with an additional $400 million vesting over time. This amounted to Apple Inc.’s biggest acquisition to date.
The deal, which is awaiting regulatory approval, is scheduled to be consummated sometime this quarter, which ends mid-September. The lawsuit should not impact closing of the deal.
Apple’s Other Legal Issues
This will put a lot more on Apple’s legal plate considering they are currently engaged in litigation with Samsung and other companies. Beats Electronics is also facing litigation of its own.
The Bose vs. Beats Lawsuit in its Entirety
Bose vs. Beats (Delaware district court)
The Bose vs. Beats ITC Complaint in its Entirety
Bose vs Beats (ITC complaint)