Happy staffers Tracy Leigh, Sixten Abbot and Tom Hazzard.
A small Rhode Island technology manufacturer, which saw its very existence threatened when a large competitor apparently stole its product design, has reached a settlement with the competitor that instead could lead to greater exposure and expansion for the company. ttools of Providence had been manufacturing a pen that could be used both on a computer screen and as a traditional writing implement and had entered into discussions with a national corporation to have its product included in the Palm Computing catalog.
Instead ttools found that IDEO, a marketing design firm that works with Palm Computing, had begun to produce a stylus almost identical to the ttools product. This past summer ttools filed suit against both IDEO and Palm Computing, claiming patent infringement. Last week that dispute was resolved when IDEO agreed to enter into a licensing arrangement with ttools.
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The settlement means that this year and a half old Rhode Island company, founded by three Rhode Island School of Designs graduates, will have its premier product included in a national catalog, while also earning royalties.
Husband and wife team, Tracy Leigh and Tom Hazzard and their friend, Sixten Abbot,founded the company in 1998, and within a month had developed its first product, the throttle pen. Soon, however, they were fighting against Palm Computing, 3Com’s Palm Computing Division, and IDEO.
”We met with Palm in March and sent a few samples,” said Tom Hazzard, vice president of ttools. “We were interested in being featured as part of their palm accessories catalogue. The company’s initial response was really positive. They said they had never seen anything like it.”
The throttle is a dual-function stylus pen that can enter data into a hand-held electronic device, as well as function as a pen. The stylus was designed and created by Hazzard to be compatible with all models of the Palm Computing line of connected organizers, and other personal digital devices.
After the initial conversations, Palm Computing then approached ttools about licensing the company’s technology to develop its own version of the stylus. Hazzard said by the early summer when ttools applied for a patent on its throttle, the conversations had stopped.
”When I called to follow up with the company, lawyers told me they were no longer interested because they were working on something of their own,” Hazzard said.
Four months later, Palm filed its own patent request for a dual-action stylus, which was very similar to ttool’s throttle, and began marketing its own version of the stylus in its accessories catalogue.
”Our patent lawyer saw their version of our product in Newsweek,” said Leigh, president of ttool. “But that didn’t stop us. We actually accelerated our product development plan.”
ttool received patent rights for its throttle system in June of 1999, and since then has released two more versions of the product. Palm’s application is still pending.
”It’s very common to assume that the company won’t be in business that long, or doesn’t have the capital to go up against such a big corporation,” Leigh said.
But the large companies were wrong. This past summer, ttool filed a lawsuit in U.S. District Court against Palm Computing, 3Com Corporations, and IDEO, which marketed the product, for patent infringement.
Earlier this month ttools signed a licensing agreement with IDEO, effectively settling the dispute with all parties. The agreement allows IDEO to use the patented throttle technology for a licensing fee. Under the agreement, ttools also authorized IDEO to continue to sell the design to Palm Computing, with royalties being paid to ttool.
”We’re very pleased with the agreement,” Hazzard said. “In this case, imitation has been proven the sincerest form of flattery. The agreement validates the intrinsic value of our product, from both aesthetic and functional standpoints.”
Still, Hazzard said he wanted Palm’s version of the pen off the market. “It’s a good agreement and it validates our intellectual property,” he said. “And now Palm is going to have to say this is a ttool stylus, so they are endorsing our company and this product.”
But, the couple agrees, there have been drawbacks to the agreement, and the process. None of their other products will be part of the accessories magazine, which they consider a premiere source for customers, and the company’s capital is not as they hoped it would be after a year and a half.
”Our ultimate goal is to have the rest of our product line part of the catalogue,” Hazzard said. “The whole thing has taken away a lot of business and we are not where we could be.”
That could change soon too. Though details couldn’t be released, Leigh said ttools is in the process of signing an agreement with a large New England pen manufacturer, which would take over the manufacturing and distribution part of the operation.
”We can’t make the product fast enough,” she said. Currently, the product line is assembled by grandparents, cousins, parents, and the company owners themselves. “This will bring greater quality and quantity to our products. This will bring us into every office supply chain in the country.”
That’s a long way from the third floor attic space on the East Side of Providence the company now works out of, and an even longer way from it’s beginning.
”We basically started this company with $50,000 and Tom’s mother was our first investor,” Leigh said. “We knew that it was something we could do. We feel that our product is the best out there, and we are going to try and make it a standard in the industry. So far it’s been very challenging.”
