News of Court Verdict Pumps Up Odetics Stock
Odetics Inc. shares rose 24% Monday after a jury awarded the company $70.4 million in damages in a patent-infringement case against Storage Technology Corp.
Odetics shares rose $1.56 to $8 on volume of 541,800 shares, more than 12 times the three-month daily average. Earlier in the session, the stock surged to a 52-week high of $9.25 a share before retreating a bit. Storage Technology shares slipped 6 cents to $75.44.
News of the verdict in a Virginia federal court was released Friday after the close of trading. A jury found that Storage deliberately infringed on an Odetics patent related to data storage in network computing.
The judge hearing the case could triple the award and order Storage to take other actions after a hearing April 17.
Even if the judge were to assess treble damages, the onetime cost of about $210 million would reduce Storage earnings by 5 cents to 15 cents a share and have little impact on the company’s business, said Gary Helmig, an analyst at Soundview Financial Corp. who rates the stock a “buy.” He expects the company to earn $5.30 a share in 1999.
Storage, based in Louisville, Colo., said it will appeal the verdict.
The company “feels the judge was in error in not allowing the jury to view a videotape that showed they were practicing the technology prior to the Odetics patent being issued,” Helmig said.
Storage Technology also said it has designed alternate technology so customers won’t be seriously affected.
Anaheim-based Odetics lost an earlier case against Storage Technology in 1996, but an appeals court ordered a new trial.
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Odetics Inc.'s stock jumped Monday on news that the company had won $70.4 million in a lawsuit. Monthly closing stock prices and Monday’s close:
Monday’s close: $8.00
Source: Bloomberg News