Digital, Micro Technology Settle Feud Over Patents
Micro Technology Inc. has settled litigation and a highly publicized grudge match with computer giant Digital Equipment Corp., the companies said Monday.
Under the settlement, Micro Technology, based in Anaheim, and Digital, a Massachusetts company with annual revenue of nearly $14 billion, agreed to drop lawsuits against each other and share some patented technology with each other.
Micro Technology will also stop producing by mid-1993 a line of computer storage products that Digital said had violated its patents. The products used a certain technology, known as SDI/STI, to connect storage units to Digital minicomputers.
“The technologies we are phasing out were becoming obsolete anyway,” said Tom Raimondi, vice president of marketing for Micro Technology. “This is a positive agreement for us since we now have access to more popular technologies.”
Nikki Richardson, a Digital spokeswoman, said the agreement closes the book on all litigation related to the SDI/STI patents.
After winning a series of patents in the 1980s, Digital began enforcing its patents on competitors in the computer storage industry in 1991. More than 25 companies agreed that by the end of June, 1993, they will stop making products that use the SDI/STI technology.
Digital sued Micro Technology in courts in Denver and Germany in June, 1991. Micro Technology countersued a month later. Micro Technology’s president, Steve Hamerslag, denied any infringement and alleged that Digital was engaged in anti-competitive behavior.
In October, Micro Technology lost a round in the German court when a five-judge panel upheld the validity of Digital’s patents.
Neither company would say if Monday’s settlement involved an exchange of money. Raimondi did say that Digital granted eight patent licenses to Micro Technology, most of them related to techniques that would allow Micro Technology to take part in a more current market than the one it is giving up.
In turn, Micro Technology will license nine recently acquired patents to Digital, which will market several products made by Micro Technology.
Micro Technology was able to exercise some legal muscle in the settlement because of its $18-million acquisition in January of SF2 Corp. in Sunnyvale. During the past year, SF2 has been granted nine patents for its computer technology known as RAID 5/6, or redundant arrays of inexpensive disks. Such systems store data on multiple hard disk drives to protect against failure in any one disk drive.
The acquisition enabled Micro Technology to reduce its dependence on the SDI/STI products, which now account for about 20% of its estimated $125 million in annual revenue. A year ago, SDI/STI products accounted for more than half the company’s revenue.
