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A Canadian company won a verdict worth about $80 million last week when a federal jury decided that a New Jersey company had engaged in unfair trade practices and attempted to monopolize the market for the tags used in a shoplifter-detection system. After a month-long trial, the jury found in favor of plaintiff ID Security Systems Canada Inc. of Ontario on four of its five claims against Checkpoint Systems Inc. of Thorofare, N.J. Lead plaintiff’s attorney Rudolph Garcia of Philadelphia’s Saul Ewing said the jury found two violations of � 2 of the Sherman Act — attempted monopolization and conspiracy to monopolize — and awarded damages of $28.5 million for those claims. Sherman Act damages are automatically trebled by the court, but Garcia said that the calculation of the judgment from Friday’s verdict was complicated slightly by a previous settlement. Since ID Security Systems had previously settled related claims against a Japanese company, Tokai Electronics, for $2.11 million, Garcia said that figure was subtracted from the jury’s award prior to trebling. As a result, Garcia said, U.S. District Judge Eduardo C. Robreno in Philadelphia reduced the damage figure to $26.39 million and entered a judgment against Checkpoint for $79.17 million. Garcia said the final judgment is likely to approach or even exceed $82 million because ID Security Systems is now entitled to an award of attorney fees for the protracted litigation. The jury also found in favor of ID Security Systems on two state law claims — tortious interference with contractual relations and unfair competition — and awarded $19 million on those claims. Garcia said the victory on the state claims wouldn’t increase the judgment, however, since the plaintiff in such a case is forced to elect recovery under either the state or federal claims. One of the key battles in the trial involved the issue of the “relevant market.” There are currently two leading technologies used in the market for shoplifter-detection systems. Checkpoint Systems Inc. markets a system that uses radio frequency technology, and its main competitor, Sensormatic Corp., employs an acoustomagnetic technology. Both systems rely on the use of tags affixed to products that must either be removed or desensitized by a cashier to prevent an alarm from sounding when the product leaves the store. In its suit, ID Security Systems said it had attempted to enter the burgeoning market for supplying retailers with tags that could be used with the radio frequency systems. But when ID Security Systems struck a deal with Tokai in which the Japanese company would manufacture tags that ID Security Systems would market, the suit alleged that Checkpoint set out to protect its monopoly by inducing Tokai to breach the contract. Checkpoint later bought out Tokai’s assets, the suit said. And when ID Security Systems began developing a new generation of improved radio-frequency tags, the suit alleged that Checkpoint used unfair practices to delay the product’s debut by nearly four years. Checkpoint’s lawyers — C. Clark Hodgson Jr., Patricia Casperson, Michael C. Chase and Keith R. Duthill of Philadelphia’s Stradley Ronon Stevens & Young — argued that the “relevant market” should include all shoplifter-detection tags, including the acoustomagnetic tags used with Sensormatic’s system. As a result, they argued, Checkpoint had no monopoly. But the jury sided with ID Security Systems and found that there is a valid market for radio frequency tags. Garcia was assisted at trial by Saul Ewing attorneys William A. DeStefano and Kara H. Goodchild.

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