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Oakley Settles Suits Against Luxottica

May 22, 2003|From Bloomberg News

Oakley Inc., the maker of sunglasses worn by athletes such as baseball player Ichiro Suzuki and most famously by four-time Tour de France champion Lance Armstrong, said it settled lawsuits accusing bigger rival Luxottica Group of copying patented lens designs.

Financial terms were not disclosed.

Oakley, headquartered in Foothill Ranch in Orange County, had sued Luxottica and subsidiaries Sunglass Hut, LensCrafters, Ray-Ban Sun Optics, Arnette and Revo, accusing the world's biggest maker of luxury eyewear of infringing Oakley patents.

Sunglass Hut accounted for as much as a quarter of Oakley's annual sales until Luxottica, based in Milan, Italy, bought the chain in April 2001.

The dispute began shortly after that, Oakley said, alleging that Luxottica Chairman Leonardo Del Vecchio tried to force Oakley to slash prices and, when that didn't work, ordered Sunglass Hut and LensCrafters to sell knockoffs made by Ray- Ban.

Luxottica denied the allegations, saying its glasses differed from Oakley's designs.

The standoff on sales lasted until the companies signed a new three-year agreement in December 2001, although the patent suit continued.

In January, a California appeals court upheld a ruling that blocked Luxottica from selling sunglass models with "Emerald" green or "Ice" blue tinted lenses while Oakley pursued its claim.

Oakley will continue to use its patented XYZ Optics, and Luxottica will use "an agreed-upon alternative method of optical correction," Oakley said.

Other patent-infringement lawsuits filed by Oakley, including one against Fossil Inc., will continue.

"This settlement eliminates one of the potential obstacles to the continued development of a strong commercial relationship between two leaders in the sunglass category," Oakley Chief Executive Jim Jannard said.

A spokeswoman for Luxottica did not immediately return a call seeking comment.

Luxottica's shares fell 1 cent to $12.33 on the New York Stock Exchange. Oakley shares rose 5 cents to $10.95, also on the NYSE.

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