Rival sues PSC over royalties agreement.

Byline: CHRISTIAN WIHTOL Register-Guard Business Editor

PSC Inc. and rival scanner maker Symbol Technologies Inc. have gone from being enemies to being friends and now back to being enemies again, all in about a year and a half.

PSC, which operates a 650-employee factory in west Eugene, late last week was sued by Symbol in a dispute over a November 2000 agreement that was supposed to settle the previous legal spat over technology royalties between the two companies.

Symbol on June 27 sued PSC in state court in Suffolk County, N.Y., seeking to force PSC to comply with the 2000 agreement and also seeking to get out of part of the agreement, according to a news release from PSC.

PSC on June 21 had sent Symbol a notice that it considered Symbol to be in breach of the 2000 agreement, PSC said in the release.

Details of the dispute were not available Monday. PSC declined to provide The Register-Guard with a copy of the lawsuit or of its notice to Symbol. PSC also declined to comment.

Symbol, which is based in New York, did not return telephone calls.

Symbol is one of the scanner industry's leaders, with $1.4 billion in sales last year. PSC is a tiny niche player, with $187 million in sales last year.

The companies have been launching legal assaults against each other for years.

It's "more the norm to have lawsuits" between the firms, said Bill Parnell, executive vice president and chief operating officer for PSC. The latest dispute has no immediate effect on the Eugene factory, Parnell said.

"It's really business as usual here at the factory," he said.

Eugene is PSC's main manufacturing center. The company is one of Lane County's largest high-tech employers.

The current dispute dates back to at least 1996, when PSC sued Symbol in federal court in New York over license contracts between the companies.

The contracts involved royalty payments from PSC to Symbol for the right to use certain scanner technologies owned by Symbol.

PSC contended that it owed Symbol a lesser royalty percentage than Symbol was demanding.

A federal judge in early 2000 ruled in Symbol's favor, a decision that might have required PSC to pay millions of dollars in back royalties to Symbol.

PSC vowed to appeal, and the sides began negotiating a settle- ment.

In November 2000, PSC and Symbol reached a settlement that resolved royalty disputes and clarified agreements between PSC and Symbol.

Also, the settlement required PSC to buy hand-held scanners and scan engines from Symbol, and required Symbol to buy fixed-position retail scanners from PSC.

As part of the settlement, PSC recorded $12 million in costs, much of it royalty payments to Symbol covering 1999 and 2000.

Further details of that settlement were not immediately available on Monday.

In its press release, PSC indicated that Symbol no longer wants to have to buy PSC scanners.

The Symbol lawsuit is without merit and PSC will "vigorously defend" against it, PSC said in the news release.

PSC's stock was unchanged on the Nasdaq over-the-counter market on Monday, at 59 cents a share on a volume of 40,500 shares.

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