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EMC, HP bury the hatchet

Four years later, EMC and HP settle their patent disputes. EMC looks to have come out the winner.

EMC Corp. and Hewlett Packard Co. (HP) have finally settled four years of patent disputes with a cross-licensing agreement. Officials also hinted at closer business ties.

As part of the settlement, HP agreed to pay $325 million to EMC. But instead of cash, HP can satisfy that requirement through the purchase for resale or internal use of EMC products, such as the VMware product line, over the next five years, said EMC in a statement.

Patent wars

1999: EMC sued HP claiming one of its products sounded too much like "EMC."

2000: EMC sued StorageApps citing infringement of core patents related to its SRDF and Time Finder products.

2001: HP acquired StorageApps for its virtualization technology.

2002: HP sued EMC citing infringement of seven patents related to data transfer between storage media, reducing the number of reads and writes in a RAID environment; and a range of other features.

EMC countersued the same day citing infringement of six patents related to foundation technology in its SRDF and TimeFinder software products.

2004: EMC won the StorageApps suit. HP was forced to stop selling its product based on this acquisition. HP appealed.

2005: EMC and HP reach a settlement that resolves all these suits.

"We hope it begins a new chapter in our relationship," said Mark Fredrickson, a spokesman for EMC.

Joe Beyers, vice president of intellectual property licensing at HP said: "By expanding our relationship with EMC's various software divisions, HP will be able to deliver a more formalized approach to selling these solutions, and explore new ways to integrate and leverage our offerings."

Neither company was willing to give any further details on integration plans.

The settlement is a complete turnaround for the two companies that have been at each others throats ever since HP dropped EMC's products in favor of selling Hitachi Data Systems technology in 1999. EMC immediately sued HP, claiming that the name of one of its products sounded too much like "EMC."

The Hopkinton storage giant won that round, but it sparked off three more lawsuits that EMC and HP filed against each other. The most damaging for HP was the patent infringement lawsuit it inherited when it acquired StorageApps for $350 million in 2001. EMC won that suit and got a permanent injunction against HP, preventing it from selling any technology from StorageApps.

That included HP's OpenView Continuous Access Storage Appliance product -- based on StorageApps technology -- a key enabler of data replication between devices from different vendors on a SAN.

Since then, HP has had a streak of bad results and faces an uphill battle in the storage industry. "A partnership with EMC just might be the catalyst it needs to pull it out of the doldrums," said Galen Schreck, analyst with Forrester Research Inc.

Related articles:
HP storage: What went wrong?
HP users burned by EMC court victory
Strategic Vendor Series: HP

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