NetApp Litigation – an update

Over the last few months, I’ve had many requests for an update on the litigation between Sun and NetApp. There is clearly quite a bit of interest in the case in the media. Developers are curious whether NetApp will be successful in hindering even greater adoption of Sun’s ZFS open source technology. (Nice to see Apple supporting ZFS.) And, I’m sure NetApp customers are interested in understanding the impact of the 22 patents Sun has asserted in response against NetApp’s product line. So, here’s a summary of where we are.

After NetApp sued Sun, we responded with six reexamination requests on the patents asserted by NetApp. Reexamination is a procedure in which a party submits documents (prior art) relating to a patent to the US Patent Office (PTO) and asks that it reconsider whether that patent should have ever been issued. If the PTO agrees and determines there is a “substantial new question of patentability” (SNQP) it will grant the request and reopen the patent examination process on that patent. Included in our requests was a significant amount of highly relevant prior art that was not considered by the PTO when it first granted the NetApp patents. (By the way, to those of you who submitted prior art – “thank you!”)

Over the last two months, the PTO has granted the first five of our reexamination requests, finding in all the cases that multiple “SNQP” exist for each patent (one request filed in June is still pending). These include, among others, US Patent Nos. 5,819,292; 6,857,001 and 6,892,211, “core patents” according to NetApp. With regard to one NetApp patent, the ‘001 patent, the PTO has issued a first action rejecting all the claims of this patent. Based on the positive response we received from the PTO, we asked the trial court to stay a portion of the litigation. Obviously, it doesn’t make sense to go through the expense and time of litigating a patent in court if the PTO is likely to find it invalid. The court agreed with our request and at least one NetApp patent has thus far been removed from the litigation. We expect to hear more from the PTO on the remaining reexaminations over the course of the year.

In our defense, we have asserted a total of 22 patents covering technology ranging from microprocessors to file system management. The NetApp products accused of infringing Sun patents include FAS6000,FAS9000, FAS3000, FAS2000, V3000, V6000filers, MetroCluster, SnapMirror, SyncMirror, SnapVault, FlexVol, FlexClone, R200 Platform, NearStore Virtual Tape Library, and FAS platforms with SATA drives. Even the recently acquired Onaro products are also subject to claims of infringement of the Sun patents-in-suit. Of note, none of the patents being advanced by Sun in the original case has been challenged by NetApp in the PTO.

A settlement conference was held yesterday before Judge Spero in the Northern District of California. And, it was rather brief. While we entered into the process with a willingness to engage in constructive discussion with NetApp, unfortunately, we weren’t able to resolve the dispute.

Why? It wasn’t for lack of effort. Instead, it’s because our two companies have very divergent views on the future of computing. It has become increasingly clear, that although NetApp originally claimed this case to be about Sun’s alleged patent infringement (an assertion which we are confident we will prove was unfounded), the case is about something else entirely. It’s really about the clash between two different business models, one proprietary, the other open. NetApp admits as much in a declaration of Dave Hitz (a document recently unsealed by the court). It is this difference that is the source of the litigation. And, as more of the world moves away from proprietary models, I expect to see other litigations arise between companies in this area.

To be clear, Sun = FOSS. We have transformed our company and aligned it around the belief that giving away our technology and investing in related communities will create greater adoption of our intellectual property and ultimately redound to the benefit of our shareholders, customers and the open source community. When it comes to Sun’s commitment to open source – “the horse is out of the barn”. Not only that, it’s also had foals. And, their names are Sun Open Storage, OpenSolaris, MySQL, Glassfish, OpenJDK, OpenSparc and…

Ethics

I read a wonderful quote the other day. It was in an article about former lawyer, Bill Lerach, a name familiar to most corporate attorneys. Mr. Lerach plead guilty to fraud and was recently sentenced to 24 months in prison in connection with a scheme to pay kickbacks to plaintiffs in securities class action cases. At Lerach’s trial, the Assistant U.S. Attorney said of the defendant: “When you conclude no one else in the game has a moral compass, it’s easy to lose yours.”

With this in mind, let me say “thank you” to the employees of Sun Microsystems for having a strong sense of direction when it comes to corporate integrity. You’re the reason we received this recognition for the second year in a row.