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Week in Review : BUSINESS : Smith Ordered to Pay Hughes $204.6 Million for Infringement

March 16, 1986

Smith International found out just how much it will have to pay to settle what is believed to be the largest patent-infringement suit ever. U.S. District Judge Harry Hupp in Los Angeles formally ruled that Smith, based in Newport Beach, must pay $204.6 million in damages and accrued interest to Hughes Tool Co. of Houston.

But Hughes, which first claimed in 1972 that Smith had infringed on one of its patents in designing a new oil well drill bit, will have to wait to collect. Smith, already hurting from the worldwide oil industry slump, has filed for reorganization and protection from creditors under Chapter 11 of the U.S. Bankruptcy Code. The action automatically places the damage award on hold.

Officials of both companies say it is likely that the Smith-Hughes fight will go a few more rounds.

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