Two New Patents Are Added in Nextec's Patent Infringement Suit Against Hallwood Group's Wholly Owned Subsidiary, Brookwood Companies, Inc.; Nextec Rep

Sep 18, 2008 (MARKET WIRE via COMTEX) -- On August 2, 2007 Nextec Applications Inc. ("Nextec") filed suit in the United States District Court for the Southern District of NY against Brookwood Companies, Inc. ("Brookwood"), a fully owned subsidiary of Hallwood Group, Inc. ("Hallwood"). Nextec's legal action arises under the patent laws of the United States and alleges that Brookwood has and continues to, with prior notice and knowledge of Nextec's patent rights, intentionally and willfully infringed on numerous patents owned by Nextec.
Through the discovery process over the last several months, Nextec's counsel has concluded and alleges that Brookwood infringes two other Nextec patents -- U.S. Patent Nos. 5,954,902 and 6,289,841. Nextec requested Brookwood's agreement to add these two new patents to the five patents already in the case. When Brookwood refused, Nextec sought leave to amend its complaint, which Judge Holwell granted, allowing these two new patents to be added. While the discovery is on-going and the information produced by Brookwood remains confidential, Nextec remains confident in its ability to prove not only infringement, but also willful infringement. If Nextec is successful in demonstrating willful infringement, Nextec can seek treble damages and attorneys' fees if deemed an "exceptional case."
Nextec's claims in this action alleged willful infringement by a number of fabrics produced by Brookwood (and methods of making them), including those fabrics that constitute two of the seven layers that make up the U.S. Army's Gen III ECWCS (Extended Cold Weather Clothing Systems) program. The Gen III ECWCS is the 3rd generation of the Army's ECWCS, and according to Atlantic Diving Supply, Inc. ("ADS"), the prime vendor for the Gen III ECWCS program, "If all options are exercised the total contract value could exceed $1.1 billion." Nextec is seeking full damages for infringement of each of the patents-in-suit, enhancement of damages for willful infringement for each of the patentsinsuit, a permanent injunction prohibiting further infringement, and other relief as may be determined by a jury or a court of competent jurisdiction.
Nextec is a technology based fabric manufacturer and licensor of its technology. Nextec's patented technology relates to performance fabrics, methods of making those fabrics, and products made therefrom, that are water resistant, have low absorption, are breathable and durable. Nextec's fabrics were the only fabrics fully field tested by the U.S. Army as part of the Army's research and development for the Gen III ECWCS layers 5 and 7, and were the only fabric for layers 5 and 7 highlighted by ADS in its press release announcing that it had been awarded the Gen III ECWCS contract.
Peter Santoro, Nextec's Co-CEO, stated, "We are extremely pleased with the court's most recent decision and our owners at General Electric and all our other partners remain extremely confident that this case will be resolved in Nextec's favor. We have currently spent over $2 million on this suit and believe that this investment will, in the end, produce extremely good returns for our company. We now are actively investigating others that may also be infringing on our patents. As I stated in the previous press release, we will hold all parties, at all levels in a supply chain, accountable that infringe on Nextec's patents and, based on U.S. patent law, all parties that use an infringing fabric at any stage in a garment manufacturing process, including its ultimate sale, would also infringe a patent holder's patents and may be liable."
Section 271(a) of the Federal Patent Laws, 35 U.S.C. Section 271(a), provides in pertinent part:
[W]hoever without authority makes, uses, offers to sell or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefore, infringes the patent.
Section 284 of the Federal Patent Laws, 35 U.S.C. 284, provides for treble damages in certain instances of willful infringement. Section 285 of the Federal Patent Laws, 35 U.S.C. 285, provides for reasonable attorneys' fees to be paid to the prevailing party in "exceptional cases."
Mr. Santoro went on to say, "We remain confident that the discovery process will produce the evidence needed to prove infringement of Nextec's patents. The Court's decision to allow two additional patents that Nextec believes are infringed really ups the ante in this case for Brookwood." Source