April 18, 2024
Signify Secures $1.4 Million from Grow Lights Maker
Nevada company required to pay substantial amount to settle licensing fee conflict
In a recent legal settlement, Fohse Inc., the self-proclaimed maker of “The Most Powerful Grow Lights In the World” has agreed to pay $1.4 million to Signify ending a federal lawsuit over alleged breach of licensing agreements. The judgment was entered in the Southern District of New York on April 15, marking the end of a dispute that highlights the importance of abiding by the terms of Signify’s EnabLED intellectual property licensing agreement.
The dispute between Fohse, a company based in Reno, Nevada, and Signify emerged over allegations that Fohse did not adhere to the stipulations of a licensing agreement that was part of their use of Signify’s patented LED technology. According to the terms of the agreement, Fohse was required to make regular quarterly royalty payments to Signify, which were calculated based on the sales of products incorporating the patented technology. Additionally, Fohse was obligated to provide detailed reports on such sales every quarter, ensuring transparency and compliance with the agreed financial terms.
Nature of the Dispute
The breakdown in compliance with the EnabLED licensing agreement, as outlined in Signify’s legal complaint, included several specific failures on the part of Fohse. Notably, Fohse missed a significant lump-sum payment that was due by July 1, 2022. Beyond this, there were discrepancies in royalty payments for the period spanning the first quarter of 2022 through the second quarter of 2023.
These payments, as reported, were not made in full, suggesting either an underreporting of sales or a misunderstanding of the royalty calculation formula. Furthermore, in the third quarter of 2023, Fohse allegedly failed to submit any sales reporting at all, breaching another major term of the agreement which compromised Signify's ability to audit and reconcile the financial aspects of their agreement effectively.
Legal Proceedings and Outcome
These alleged actions led Signify to claim damages amounting to at least $870,000. Additionally, the lawsuit accounted for accrued interest on these damages, which exceeded $65,000, further elevating the stakes of the legal battle. Signify's demands extended beyond financial compensation; they also sought a court-ordered accounting of all revenues generated from Fohse's use of the licensed LED technology. This was intended to ensure a thorough evaluation of the financial impact of the alleged breaches and to establish a basis for the comprehensive calculation of owed royalties.
The Fohse lawsuit, which was settled in less than six months for $1.4 million, contrasts with the prolonged 15-month dispute with Mega Systems Inc., which ended last week with a $500,000 settlement. Both cases centered around breaches of EnabLED technology licensing agreements with the worldwide leader in lighting.
The final judgment ordered by Judge Gregory H. Woods covers all the claimed damages and associated costs, and is enforceable under the terms of a confidential settlement agreement reached on March 4, 2024.
