Honeywell International Inc. et al v. OPTO Electronics Co., Ltd.

On September 24, 2021, Honeywell International Inc., Hand Held Products, Inc., and Metrologic Instruments, Inc. (collectively, "Honeywell" or "Plaintiffs"), represented by Mark Timothy Calloway of Alston & Bird LLP, filed a contract lawsuit against OPTO Electronics Co., Ltd. ("Opticon" or "Defendant"), seeking damages, including pre-judgment and post-judgment interest, litigation fees and costs for the Defendant’s alleged failure to pay royalties and breach of its representations and warranties, which resulted in breach of the The License and Settlement Agreement. This case was filed in U.S. District Court in the Western District of North Carolina with Judge Graham Mullen presiding. 

In the complaint, the Plaintiffs alleged that, “On January 22, 2020, Honeywell and Opticon entered into the Agreement, which resolved the dispute among the parties in the ITC Investigation and in the Delaware Action.” “The terms of the Agreement include a license grant from Honeywell to Opticon. In consideration of this license, the Agreement requires Opticon to pay to Honeywell a specified percent of Opticon's gross revenue derived from the sales of "2D Barcode Products" in the United States.”

The Plaintiffs further alleged that, “Under Section 5.1 of the Agreement, Opticon made certain representations and warranties to Honeywell, including a representation concerning its gross revenue from sales of 2D Barcode Products over the previous several years ("Opticon's Representations").” “The Agreement also contains certain audit provisions that allow Honeywell to review records to verify the accuracy of Opticon's Representations. The Agreement provides that if the audit shows that Opticon's actual revenues exceed the represented amount by a certain margin, then Opticon must pay Honeywell a percentage of the amount of revenue exceeding the amount represented, plus the costs of the audit.”

The Plaintiffs also alleged that, “On December 16, 2020, Honeywell notified Opticon that it was invoking its audit rights under the Agreement.” “The audit showed that Opticon's revenues from sales of 2D Barcode Products were actually tens of millions of dollars more than Opticon represented in the Agreement, in part because Opticon had excluded certain 2D Barcode Products from its calculations.” “Opticon therefore breached its representations and warranties and materially breached the Agreement. Because of that breach, Honeywell is entitled to certain monetary damages specified in the Agreement.”

The only claim for relief laid down by the Plaintiffs is for Breach of Contract, wherein the Plaintiff alleged that Opticon breached its representation under Section 5.1 of the Agreement. Plaintiff further alleged that due to Opticon's breach of its Section 5.1 representation, it owes Honeywell the monetary damages set forth in Section 5.1. Plaintiff then alleged that Opticon has not paid, and continues to fail to pay, the full royalty delineated in Section 4 of the Agreement. Plaintiff also alleged that due to Opticon's breach of Section 4 of the Agreement, it owes Honeywell the missing royalties defined in that section. Honeywell alleged that it has and continues to be damaged as a result of Opticon's breach.

In the prayer for relief, the Plaintiffs requested the Court for a judgment in their favor and against Opticon to recover damages resulting from Defendant's breach of the License and Settlement Agreement and a judgment for prejudgment and post-judgment interest at the legal rate. Plaintiff further requested an award of litigation fees and costs. 

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