Camarillo-based telecommunications firm California Amplifier, Inc., stung by a lawsuit by rival Andrew Corp. last year over allegations of patent infringement, has countered with its own suit against Andrew, also claiming patent infringement. Jim Petelle, Andrew Corp.’s legal counsel, said California Amplifier’s suit is easy to figure out. “There’s no doubt in my mind that this is their strategic response to our lawsuit,” Petelle said of the Feb. 15 filing. In March 2000, the Chicago-based Andrew sued California Amplifier. According to the suit, California Amplifier used patented designs of several transceiver products that Andrew owns. A transceiver is a transmitting device for microwave and digital technologies. California Amplifier Chief Executive Officer Fred Sturm, who denies his company pilfered Andrew’s patents, said Cal Amp sued to protect the value of its technology. He said, of the simultaneous two-way microwave communications system, “California Amplifier will aggressively protect its intellectual property rights and the interests of its shareholders.” The suit seeks unspecified damages and demands that Andrew cease using Cal Amp patents. Sturm would not elaborate on the lawsuit. Briefs in the Andrew suit are scheduled to be filed in April. Rich Valera, an equity analyst with Needham & Co. in New York, said the litigation is not likely to affect the bottom line of either company. He said neither side appears to have a good case. “The Andrew lawsuit to me sounded pretty bogus,” Valera said, “and I guess (Cal Amp) said, ‘Well, if you’re going to sue us over patent infringement, you’re infringing on our patent.'” “Companies do this a lot, trying to do damage control by filing a suit,” he said, referring to efforts to stem the effect of negative publicity on a company’s stock. Suit accompanies earnings blow The latest court action came five days before California Amplifier announced that its fourth-quarter earnings will be lower than anticipated. Cal Amp stock fell from an $8.62 opening on Feb. 20 to $6.03 by the end of the day, following the earnings alert. Its 52-week high is $63, its 52-week low $5.62. It closed at $6.12 on Friday. Cal Amp had $32.6 million in revenues in the quarter ending November 2000, up from $26.3 million for the same period in 1999. By comparison, Andrew Corp. posted $285 million in sales in the last quarter of 2000, up from $233.6 million in the same quarter of 1999, its microwave and satellite equipment business making up 45 percent of its revenue. Microwave and satellite equipment account for about 30 percent of Cal Amp’s sales. The bulk of its revenue comes from making amplification and conversion equipment for improved satellite television reception. It also makes its MultiCipher cable scrambling system, which allows only paying cable television customers to receive cable programming. Cal Amp made the transition from a military supplier to the civilian sector in the early 1990s, finding a niche in the highly competitive telecommunications business. Sturm said the company expects sales of between $26 million and $27 million for the quarter ending March 31. Andrew’s stock price has ranged from a high of $42.12 to a low of $16, closing last Friday at $16.33. Sturm said Cal Amp’s drop in earnings is due to shrinking demand for satellite products from customers who continue to reduce inventory levels. The company also received bad news last week when Sprint Corp. announced plans to reduce inventory on two-way wireless transceiver systems developed by Cal Amp, further damaging the company’s prospects for increased revenue next quarter. Sprint is the company’s biggest customer for transceivers. Sprint is building a multi-channel Multipoint Distribution System (MMDS) in 13 cities, using its existing inventories of fixed wireless transceivers. The system uses towers and transceivers, carrying voice and data communications as a wireless alternative to the Internet. Cal Amp officials had hoped to roll out the system to dozens of other cities, but those plans were postponed after Sprint agreed to hold off its system expansion until a next-generation version of the system by Cal Amp becomes available later this year.
