3M Files Lawsuit Against Elo Touch For Patent Infringement

3M Company (NYSE:MMM) has recently filed a patent infringement suit against a leading global supplier of touchscreen solutions, Elo Touch Solutions Inc.

3M has more than 109,000 patents in various categories across its product portfolio. Over the years, the company has successfully enforced its patent rights against unauthorized uses and filed legal suits against firms that infringed them.

In the latest lawsuit filed in the federal district court in Wilmington, DE, 3M alleged that Elo Touch violated four of its patents registered in the United States. The infringed patents relate to 3M’s metal mesh conductor technology that is widely used in touch systems and displays.

Based on proprietary ultrafine metal mesh design, this technology enables developers and integrators to transform a piece of glass into an exciting multi-touch and real multi-user customer experience. This advanced technology builds on existing and established range of projected capacitive (PCAP) multi-touch systems for broad applicability across touch sensors of all sizes. These include large-format touch sensors used in interactive whiteboards, conferencing systems, casino gaming machines, digital signage displays and fast-food self-ordering systems.

With more than 30 years of experience in the display industry, 3M offers numerous interactive and engaging touchscreen products powered by surface capacitive touch technology. These products form an integral part of its Electronics and Energy segment and serve retail, industrial, healthcare and transportation applications.

The various display products from this segment include multi-touch PCAP displays that create truly interactive touchscreen experiences with ultra-fast multi-touch response for digital signage with consumer-driven features and functionality. Built for commercial applications, the displays also provide smartphone-like touch experience. With a wide array of products for diverse businesses, 3M has outperformed the industry in the last three months with an average return of 8.9% against a decline of 3% for the latter.

3M's global footprint, diversified product portfolio and the ability to penetrate different markets have been its forte. Portfolio management, investment in innovation and business transformation are the three key areas on which 3M intends to focus moving forward. 3M also intends to continue investing in capital expenditures and research and development to support organic growth as it aims at a prudent capital structure strategy and increased capital deployment.

In the five-year period from 2016 to 2020, 3M expects 8-11% growth in earnings per share driven by an organic sales growth of 2-5%. The company expects about 20% return on invested capital during this period with a free cash flow conversion rate of 100%. Furthermore, 3M is standardizing its business processes through a new, global ERP system. The company expects these efforts to result in $500-$700 million in annual operational savings by 2020, and an additional $500 million reduction in working capital. Such focused attempts to maintain growth momentum is commendable.

3M currently has a Zacks Rank #2 (Buy). Other stocks in the industry worth considering include ITT Inc. (NYSE:ITT) , Raven Industries, Inc. (NASDAQ:RAVN) and Leucadia National Corp. (NYSE:LUK) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

ITT has a long-term earnings growth expectation of 12.5%. It has surpassed estimates in each of the trailing four quarters with an average positive surprise of 8.1%.

Raven has a long-term earnings growth expectation of 10%. It has delivered earnings beat thrice in the trailing four quarters with an average positive surprise of 25.8%.

Leucadia has an expected long-term earnings growth rate of 18%. It has exceeded estimates thrice in the last four quarters with an average beat of 21.2%.

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