No Court Protection for Spanish Digital Lock Maker

SAN FRANCICSCO (CN) – A federal judge has ruled that digital lock maker Ojmar doesn’t need the court’s protection against lawsuits from rival security firm Digilock.

Last year, the Spanish company Ojmar accused Digilock, based out of Petaluma, California, in a federal lawsuit of abusing its position to keep Ojmar out of the U.S. electronic lock market.

Ojmar has made electronic keypad locks since the 1990s, mostly for businesses such as health and fitness clubs, spas and universities that use lockers.

In its motion for a preliminary injunction, Ojmar said Digilock has long controlled 90 percent of the electronic lock market in the U.S. by scaring off the competition, until Ojmar started making inroads. With its OSC Touch Lock, Ojmar wrested away some of Digilock’s sales, landing lucrative deals with Virginia Commonwealth University and American Express.

Digilock sued Ojmar for patent infringement in November 2014, but the suit was stayed in April last year pending a ruling by the United States Patent and Trademark Office’s Patent Trial and Appeals Board.  The board has since ruled Digilock’s claim invalid.

On Friday, U.S. District Judge Haywood Gilliam said the board’s decision voids Ojmar’s need for an injunction.

“Ojmar’s allegation that Digilock continues to threaten it with sham litigation is too speculative to establish irreparable harm,” Gilliam wrote in a six-page ruling.

He also refused to block Digilock from enforcing exclusivity contracts with three locker equipment manufacturers: Legacy Lockers, Ideal Products, and Club Resource Group.

The contracts prevent these three companies from purchasing or recommending digital keypad locks from manufacturers other than Digilock, which Ojmar claims threatens its survival in the U.S.

In asking Gilliam for the injunction, Ojmar cited declining sales in 2015 and expected revenue losses in 2016.

But Gilliam said that isn’t enough to prove the threat.

“Here, Ojmar’s declining sales in 2015 and expected losses in 2016 do not establish a threat to the company’s short-term survival,” Gilliam wrote. “Moreover, Ojmar’s fear of foreclosure from the market is unsupported. While Ojmar claims it ‘faces being cut off from its customer [original equipment manufacturers] and unable to reach end users through the only effective channel to market,’ the court is unconvinced that Ojmar has no alternative avenues for sales.”

He added, “Furthermore, loss of prospective business opportunities is generally an economic harm that can be valued and compensated upon later success at trial.”

Attorneys for both Ojmar and Digilock did not respond to emailed requests for comment.

 

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