Hitachi, EMC end court battle with secret settlement and API swap

By Kevin Komiega, News Writer 05 Mar 2003 | SearchStorage.com

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Let bygones be bygones, and let patent infringements be paid for with technology swaps and secret amounts of cash.

In a joint announcement Tuesday, storage rivals Hitachi Ltd. and Hopkinton, Mass.-based EMC Corp. put down their subpoenas and settled a patent infringement lawsuit that has hindered interoperability talks between the companies for nearly a year.

The once-feuding duo announced the settlement of all pending patent infringement litigation. The pair also announced 5-year agreements that include patent cross-licenses and "mutual releases" among EMC, Hitachi Ltd. and Hitachi's subsidiaries: Hitachi Data Systems Corp. and Hitachi Computer Products America Inc.

The companies have also agreed to lay out a framework for exchanging storage-related application programming interfaces (APIs) -- a move that could allow EMC software to manage HDS hardware and vice versa.

Under terms of the agreements, Hitachi has agreed to make undisclosed payments to EMC. The companies said the remaining terms of the cross-license agreement are confidential.

EMC spokesman Dave Farmer said the value of the "balancing payments" Hitachi will make to EMC will remain confidential.

Farmer said these announcements are important because EMC has shown a willingness to protect its intellectual property (IP) while at the same time avoiding a lengthy litigation process.

"Given the clear value of EMC's IP, EMC will also receive tangible, monetary value to balance out the technical value of the patent agreement," Farmer said. "Significantly, EMC's willingness to openly swap APIs with recognized competitors, like HPQ and now Hitachi, highlights the fact that our efforts here are very real."

EMC and HDS were in discussions regarding API swapping more than a year ago, but the companies walked away from the bargaining table after patent litigation began.

This API deal is the second in as many days for EMC. The company on Monday announced an interface exchange with Veritas Software Corp., Mountain View, Calif.

One analyst, Mike Karp, of Enterprise Management Associates Inc., Boulder, Colo., said HDS and EMC decided to "stop feeding" their lawyers.

"It looks like they just got tired of the battle," Karp said. "No one was winning, so they wanted to move on and get back to business."

Karp said the cross-licensing agreement between EMC and HDS is still in the works, but he expects them to iron out the details within the next 30 to 45 days.

With the APIs in hand, EMC will more easily incorporate the management of Hitachi products into many of EMC's open software products, such as ControlCenter.

EMC filed patent infringement complaints against Hitachi on April 11, 2002, with the United States International Trade Commission (ITC) and U.S. District Court in Massachusetts. The ITC proceeding was scheduled to go to an evidentiary hearing March 10. Hitachi had a patent suit of its own pending against EMC, which was filed in U.S. District Court in Massachusetts on April 17, 2002.

"From a technology licensing standpoint, this is a mutually satisfactory outcome and a settlement of litigation without having to go to court," said Christine Wallace, senior vice president of global strategy and planning at Hitachi.

Wallace said that the resultant cross-licensing deal should not be categorized as a strategic relationship, but it is very beneficial to both companies.

The API exchange is expected to be finalized in the coming weeks, Hitachi said.

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