Library Technology Guides

Document Repository

Two major lawsuits jolt library automation industry

Smart Libraries Newsletter [December 2009]

Breeding, Marshall.

Copyright (c) 2009 ALA TechSource

Abstract: In recent months, two major lawsuits have been filed in the the library automationindustry. Queens Borough Public Library filed a complaint on July 2, 2009 against SirsiDynix for breach of contract and 3M has filed suit against EnvisionWare for patent infringement. Both of these lawsuits address interesting issues that bring pivotal libraryautomation legal concerns to the surface. Neither accusation has been proven, and both are still pending legal action or settlement. The complaints filed with the courts stand as public documents exposing the plaintiffs’ concerns in detail. The defendant’s response to those claims may not become public until the issue comes before a court, or may never be disclosed if the parties settle out of court. While major lawsuits attract much attention, they must be considered skeptically until both sides of the matter can be understood.


In recent months, two major lawsuits have been filed in the the library automation industry. Queens Borough Public Library filed a complaint on July 2, 2009 against SirsiDynix for breach of contract and 3M has filed suit against EnvisionWare for patent infringement. Both of these lawsuits address interesting issues that bring pivotal library automation legal concerns to the surface. Neither accusation has been proven, and both are still pending legal action or settlement. The complaints filed with the courts stand as public documents exposing the plaintiffs’ concerns in detail. The defendant’s response to those claims may not become public until the issue comes before a court, or may never be disclosed if the parties settle out of court. While major lawsuits attract much attention, they must be considered skeptically until both sides of the matter can be understood.

With these caveats, we review some issues regarding these pending legal matters. 3M vs. EnvisionWare 3M Company and 3M Innovative Properties Companies filed a patent infringement suit against EnvisionWare, Inc. in the United States District Court of Minnesota on July 23, 2009. The complaint deals with patents held by the company related to technologies developed for and exploited by the 3M Library Systems division. 3M Library Systems offers a variety of products related to theft detection for library materials and self-service circulation systems. The company offers a theft detection system that involves exit gates that sound an alarm if patrons attempt to leave the library with library materials that have not been properly charged out. The library plants 3M’s Tattle-Tape strips in each of its materials which will trigger the alarm unless deactivated, a routine part of the circulation check-out process. This theft-detection system is based on electromagnetic technologies.

3M also offers products that use RFID technologies. RFID chips replace barcodes as inventory control markers that uniquely identify each physical item in a library’s collection. RFID tags can be programmed with a unique identifying number and other data about a given item. In the library context, RFID readers can be used to identify materials during circulation transactions. Unlike barcode readers that require a discrete scan using an optical reader, RFID readers are able to detect multiple tags that come within range simultaneously. In addition to replacing barcodes for inventory identification, RFID tags can also be used for theft detection when paired with appropriately configured exit gates.

These technologies form the basis of a variety of circulation and inventory control-related products that 3M offers to libraries. The company has developed self-checkout workstations with a variety of features that allow patrons to process materials that they want to borrow from the library on their own. The self-checkout stations interact with the library’s automation system as it processes the circulation transaction. The self-checkout station also deactivates the item for the theft-detection system, whether it uses electromagnetic Tattle-Tape strips or RFID tags. 3M’s selfcheck stations include features that allow them to collect any fines that may be due from the patron.

3M also created a product called the Digital Library Assistant, a portable, hand-held RFID reader that can be used for a variety of functions related to inventory control of library materials. A library worker might use the Digital Library Assistant to scan books on shelves to perform an inventory, to check for proper shelving order, to search for missing items, or to identify items on a list that have been requested by library patrons.

3M applied for and received a number of patents related to these products. United States Patents involved in the suite include: 6,486,780, 6,232,870, and 6,857,568.

EnvisionWare began as a company involved in products related to the management of public library workstations. This included a reservation and scheduling system to allow libraries to manage the use of library computers by their patrons, especially for Internet access, but also for word processing and other applications. EnvisionWare also offers products to manage patron printing, including the ability to meter and charge fees.

In 2006 EnvisionWare entered the self-check and RFID arena, eventually leading to the development of a full line of RFID products for self-check and automated material handling.

Its products include OneStop and All-In-One self-service circulation stations and LibraryPDA, a portable device for reading RFID tags and barcodes. These two products, according to the complaint filed by 3M, violate its patents. One of the specific features called out in the complaint involves the collection of fees as part of a self-check workstation.

One of the major contributions that 3M made to the self-check industry that has proven to have exceptionally broad application involves the Standard Interchange Protocol (SIP) which was proposed as an industry standard protocol dealing with exchanging transactions related to patrons and items for circulation. SIP continues to be widely used despite the development of NCIP (NISO Circulation Interchange Protocol). This lawsuit does not challenge the use of SIP.

In the library automation arena, anything involving RFID technologies, such as self-service stations and automated materials handling, represents an area with the strongest growth potential. While most libraries have a basic library automation system in place, we are in the early phases in the adoption cycle of these technologies. The outcome of this lawsuit could make an impact on this fertile market. Key questions include whether the current and potential products in this niche of the library automation arena can compete freely and which of them may be subject to licensing from patent-holders like 3M. Patents protect the investments made by individuals or organizations as they create inventions or perform research and development and are a reality for others that want to offer competing products. Competitors must either create products that do not intrude on existing patents or make arrangements to license the intellectual property involved.

No court date has been set for litigation of this case.

Queens Borough Public Library vs. SirsiDynix

The Queens Borough Public Library has taken legal action against SirsiDynix, making claims of damages related to its 2006 procurement of Horizon from Dynix Corporation. Queens ranks as the busiest public library system in the United States with annual circulation transactions toping 23 million. The library went through a procurement process to replace its aging DRA system, which had been in place since 1990, and was no longer being developed by Sirsi Corporation, which had acquired DRA in 2001. Queens’ procurement process began in 2005, culminating with the selection of Horizon from Dynix Corporation, with a license agreement signed in March 2006. At about the same time, Dynix Corporation was acquired by Sirsi Corporation, forming a new company that does business as SirsiDynix.

The license agreement signed was between Queens Borough Public Library and Dynix Corporation. At the time of the merger, according to the complaint, Sirsi Corporation signed a guarantee that it would stand by the terms of the license. The complaint specifically names Dynix Corporation and Sirsi Holdings in the lawsuit; SirsiDynix is the current business name of the merged company.

SirsiDynix ultimately withdrew from the development of the new Horizon 8.0 / Corinthian platform for which Queens had contracted. The complaint alleges that the company instead offered the product that it was calling Rome at the time, which is now marketed as Symphony, which is based on Unicorn.

Queens had rejected Unicorn in its procurement process and states in the complaint that it would not be a viable option as its new automation system.

The Queens Borough Public Library has since moved on to implement the Virtua ILS from VTLS. Virtua was put into production replacing DRA in July 2008, following an accelerated implementation project.

The complaint filed by Queens essentially claims that Dynix Corporation breached its contract; and that due to the circumstances of the merger that Sirsi Holdings bears responsibility for causing that breach. The complaint concludes with 10 demands, seven of which request the court to award damages of over $5 million.

On October 26, 2009, SirsiDynix filed a motion to dismiss several of the demands described in the complaint. The motion mentions specific language in the license agreement dealing with indemnity, warranties, and liabilities and specifies supporting case law. Along with the motion, the license agreement was filed as a supporting document, which is now part of the public record of this case.

In this case, the stakes are high and the opponents formidable. The documents available related to this case provide a wealth of details relating to both sides of this legal contest. As pending litigation, neither side has provided public comments. If the parties come to an agreement without trial, it’s routine for the settlement details to remain private. In the unlikely event that the matter goes to trial, more details may become public.

Cases such as this one between SirsiDynix and the Queens Borough Public Library illustrate the critical dependence that libraries have on their core library automation systems and the disruptions that erupt as products come and go on the market.

Copies of the pertinent documents are available on the Web:

Justia: Queens Borough Public Library complaint against SirsiDynix
Also available from Library Technology Guides: http://www.librarytechnology.org/docs/14288.pdf
Motion to dismiss: http://www.librarytechnology.org/docs/14344.pdf
License Agreement: http://www.librarytechnology.org/ltg-displaytext. pl?RC=14342

Publication Year:2009
Type of Material:Article
LanguageEnglish
Published in: Smart Libraries Newsletter
Publication Info:Volume 29 Number 12
Issue:December 2009
Page(s):1-1
Publisher:ALA TechSource
Place of Publication:Chicago, IL
Company: SirsiDynix
3M
EnvisionWare
ISSN:1541-8820
Permalink: http://librarytechnology.org/ltg-displaytext.pl?RC=14595
Record Number:14595
Last Update:2012-12-29 14:06:47
Date Created:2010-03-03 17:34:46