Court Reinstates $70-Million Patent Award to Odetics
Odetics Inc. is to receive $70.6 million in damages from a rival seller of data-storage equipment after a federal appeals court reinstated a jury’s award in a patent dispute.
A jury last year found that Storage Technology Corp. of Louisville, Colo., the No. 1 maker of corporate computer tape-storage systems, infringed an Odetics patent related to data storage in network computing.
The verdict was reversed by a federal judge in Virginia, but a higher court reinstated the award Tuesday. The appeals court, however, denied Odetics’ request for a larger award and additional restrictions on Storage Technology’s business practices.
The companies compete in a $32-billion world market for computer-storage products.
Anaheim-based Odetics also had hoped to get punitive damages assessed against Storage Technology, said Joel Slutzky, chairman, president and chief executive of Odetics.
“We’ve been an innovator in tape-library systems for years, and this is a critical systems patent that they were violating,” Slutzky said Wednesday. “We are very pleased to see not only the award, but the upholding of the patent.”
Odetics filed its lawsuit in June 1995. Slutzky said Storage Technology still could appeal to the U.S. Supreme Court. If the high court refuses to hear any appeal, Odetics could receive the award by the end of the year, he said.
Jurors decided that Storage Technology used Odetics technology in its ACS 4400, Powderhorn and Wolfcreek automatic computer tape-library systems from June 1995 to March 1998. That decision temporarily barred Storage Technology from selling the infringing systems.
Last August, though, U.S. District Judge T.S. Ellis III said that although the two companies produced devices that did the same job, they were physically different and worked in different ways; thus they were not legally equivalent.
Storage Technology has designed a new device to replace the disputed piece of technology, said its president and chairman, David E. Weiss.
“It is important to emphasize that this decision affects a limited number of U.S. customers,” Weiss said. “While we are, of course, disappointed at not winning this suit outright, we are pleased that the damages are contained and that this decision eliminates any disruption to our customers.”
Storage Technology’s cash flow for this quarter should compensate for nearly all the cost of the ruling, said Shelby Seyrafi, an analyst at A.G. Edwards.
Odetics supplies communications equipment for television broadcast, video-security, telecommunications and intelligent-transportation systems. The company posted a loss of $20.1 million for the fiscal year ended March 31 on sales of $83.4 million.
Storage Technology designs, manufactures and markets technical devices that store information.
Odetics stock rose $1.75 a share Wednesday to $11.75, while Storage Technology shares fell 13 cents to $22.69.
Times staff writer Jonathan Gaw and Bloomberg News contributed to this report.
