LITTON JURY AWARD OVERTURNED : NEW DAMAGES TRIAL ORDERED IN HONEYWELL CASE.

Byline: Dawn Yoshitake Daily News Staff Writer

A federal judge Wednesday overturned an earlier $702 million jury award in favor of Litton Industries Inc.'s antitrust case against Honeywell Inc. and ordered a new trial for damages.

Woodland Hills-based Litton had received the multimillion-dollar award in March after a jury determined Honeywell had illegally monopolized the commercial aircraft navigation market for inertial reference systems. The jury verdict still stands and only the damages aspect was overturned.

``Sure we would have liked to have had the damages to the extent that the jury awarded them, but we are confident we will recover them in a new trial,'' said Robert Knapp, a Litton spokesman.

U.S. District Judge Mariana Pfaelzer declined to enter the award because she could not accept the method Litton used to base its damages, Knapp said.

The jury awarded $234 million to Litton. But under federal antitrust laws, the amount of damages is tripled - representing $702 million to the Woodland Hills defense company.

And will Litton appeal Judge Pfaelzer's decision?

``While we're disappointed they didn't (accept) the jury award, we will pursue all avenues to protect and preserve our technology and competitive edge,'' Knapp said.

In its lawsuit, Litton had accused Honeywell of forming exclusive deals with aircraft makers and airlines to keep the Valley company out of the market.

John M. Leonis, Litton chairman, said the company is gratified that the judge has upheld the jury's March verdict ``to resolve Honeywell's years of unlawful business practices.''

Honeywell had argued that its growing market share was due to a superior product. The company also pointed out that Litton lost part of the market because of design and production problems.

Honeywell officials could not be reached late Wednesday night.

This case is the second which Litton has brought against Honeywell.

A federal appeals court earlier this month reinstated a 1993 jury finding that Honeywell infringed on a patent held by Litton. Damages have yet to be decided.

The 1993 case stemmed from a patent infringement over Litton's process for making laser gyroscope navigation and guidance systems. The jury had awarded Litton $1.2 billion, but Judge Pfaelzer also overturned that verdict in January 1995. She ruled that patent was unenforceable because Litton obtained it through omissions, mistakes or misrepresentations. But a federal appeals panel in Washington, D.C., that specializes in patent cases reversed Pfaelzer's ruling, reinstated the jury's findings and returned the case to her for determination of damages.