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News of Court Verdict Pumps Up Odetics Stock

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From Bloomberg News

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.

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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.

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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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Stock Surge

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:

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Monday’s close: $8.00

Source: Bloomberg News

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