NetApp files suit against Sun over ZFS

NetApp says Sun's ZFS violates its patents and seeks an injunction against its distribution, potentially putting Sun's storage business at risk. Update 9/6/07: Sun counterattacks.

Network Appliance Inc. (NetApp) revealed this morning that it is filing suit against Sun Microsystems Inc., seeking an injunction against distribution of Sun's Zettabyte File System (ZFS) software and unspecified damages.

According to storage industry analysts, a NetApp victory could have severe, possibly doomsday ramifications for Sun's storage business.

NetApp CEO Dan Warmenhoven and co-founder Dave Hitz told reporters in a conference call Wednesday morning that Sun first approached NetApp 18 months ago, claiming that NetApp's products violated three patents relating to ZFS, which Sun had acquired when it bought StorageTek in 2005.

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NetApp officials said Sun did not specify which NetApp products in particular violated the patents. But, according to a NetApp press release, "Sun's aggressive demand that we license some of their IP caused us to examine carefully whether we were infringing their IP rights and whether they might be infringing ours."

"[Sun] shifted from an aggressive position to not returning calls," Hitz said. Over the past few months, Sun also opened the source code of ZFS, and this appears to have been the last straw for NetApp. "It goes beyond using our patents and demanding that we pay them a lot of money. They've also essentially begun giving away NetApp IP for people to use for free [with the open source initiative]."

The patents in question include methods and techniques for error correction, software RAID and, according to the NetApp complaint, the method for maintaining consistent states of a file system and for creating user accessible read-only copies of a file system. "We want them to stop developing ZFS, stop distributing [it] and stop doing derivative works with it in particular," Warmenhoven said.

Far-reaching implications

NetApp officials insisted that the suit will not affect existing interoperability and support agreements between the two vendors. However, according to storage analysts, a victory in this lawsuit for NetApp could have far-reaching effects -- not just for Sun but for the storage market in general.

"This does have doomsday ramifications for Sun, potentially," especially since Sun has been making ZFS the heart of its disk storage business and touting its plans to make the software open source, according to Steve Duplessie, founder and analyst with the Enterprise Strategy Group (ESG). It's clear that to prop up its storage business, Sun needs to show technology leadership and intellectual property beyond its OEM products. In the company's last earnings call, Sun CEO Jonathan Schwartz said that Sun's homegrown IP would be the emphasis for product development going forward.

However, a win for NetApp could have a ripple effect on other vendors. "Everybody has copy on write and snapshot features now," Duplessie said. "If NetApp wins this suit, it's possible that everybody ends up having to license snapshots."

Industry watchers pointed out that it's too soon to tell what the merits of the lawsuit are and where agendas lie. "There's very little downside for NetApp in all this," Duplessie pointed out. "Even if they don't win, the worst case is that it'll bring attention and a whole bunch of marketing around features of its products."

Update: Sun counterattacks

Sun officials initially did not respond to requests seeking comment on NetApp's announcement, but sent out the following statement late Wednesday:

NetApp's legal attack against Sun's open source ZFS solution which is freely available in the marketplace is a clear indication that NetApp considers Sun technology a threat, and is a direct attack on the open source community…Many of the claims raised in the lawsuit are factually untrue. For example, it was NetApp who first approached Sun seeking to acquire the Sun patents NetApp is now attempting to invalidate. It is unfortunate that NetApp has now resorted to resolving its business issues in a legal jurisdiction (East Texas) long favored by 'patent trolls.'

"If you are a fan of ZFS and open [source], you would probably take the side which Sun will position to that NetApp is being a bully against Sun, ZFS and open source," said Greg Schulz, founder and analyst with the StorageIO Group. "On the other hand, the other extreme is that you could say Sun is desperate for revenue as it embarks on new business models built around open source with uncharted revenue streams."

There's common ground somewhere in between, Schulz said, but he added, "This is sounding more and more like a he said/she said story, [and it's] not surprising that they need to present the case in a court."

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