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…

8 Comments

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8 responses to “NetApp Litigation – an update

  1. Kevin Hutchinson

    Thanks for the update – much appreciated.

  2. Chris

    The shame of this ‘commercial squabblishness’ is that schoolchildren don’t get introduced to FOSS such as ZFS (and OpenOffice.org and Linux).
    SUN … and other profitable businesses … can afford to stand up to commercial intimidation from toe-rags like NetApp. But can a school district afford to ? Go ask a nearby one; any one will do; and tell us the answer.
    So what to do ? It’s rather pointless for engineers-who-might-work-for-large-service-corporations to go help out in their kids’ schools, when this kind of sword of Damocles is over them. Much easier to leave well alone, to allow the ‘status quo’ to persist.

  3. Mike, thanks for the updates and the link to Dave Hitz’s declaration in particular.

  4. Sunny

    Seems like NTAP is simply buying time again ZFS and trying to monetize whatever they can with WAFL. But in the process they will end up antagonizing the open source world.

  5. dave

    I love in the NetApp declaration that basically is saying the Sun is making NetApp look bad and have a bad reputation by forcing them to sue over these patents. Yes Judge, please expedite the litigation so that NetApp stops looking so stupid. And the final part is priceless, where the dude says [I’m converting this out of "legaleze"] his declaration should be sealed because otherwise people will start building products using ZFS BECAUSE HE’S CONCERNED THEY MIGHT START USING ZFS. Of course, by suing Sun, he’s basically advertising ZFS to the world that it’s a valid competitor to whatever he’s selling [which bizarrely is redacted, because why, people might see how their product isn’t comparable to ZFS]…

  6. Walter

    I wonder if their 1.1B convertible offerring is an attempt to raise settlement money. NetApp says it’s for "general corporate purposes". I’m looking forward to seeing Sun’s future innovations in open storage.

  7. Andrew

    I can understand NetApp’s frustration. Sun wants to give its software away for free, essentially as a loss-leader, in the hope that profit is then made selling hardware and services around that software. Loss leading is a perfectly legitimate business model, commonly used by grocery stores for example. However that’s not much comfort if you make a living from what another company now sells as a loss leader. A more appropriate response to that frustration would, of course, be innovation rather than filing a law suit.
    Nokia’s decision to open source the mobile operating system Symbian and Apple’s launch of the largely closed source iPhone 3G are good examples of what innovation can look like. One company has gone the open source route, hoping to attract developers with the promise of a free and open platform. The other has stuck with closed source plus a public API in the belief that this will produce a superior user experience. It’ll be interesting to see how that plays out.

  8. "For rulers like to lay down laws,
    And rebels like to break them,
    And the poor priests like to walk in chains,
    And God likes to forsake them." – Robin Williamson
    In this unproductive game, the particulars of any patent don’t really matter,
    as Sun itself discovered when IBM came knocking, according to Gary Reback’s
    classic tale:
    http://www.forbes.com/asap/2002/0624/044.html
    I’m surprised that Hitz and company didn’t learn from this,
    whereby you can challenge a competitor all you want on patents,
    but if the other side numerically has more (and you are in the
    same business — this doesn’t work for true trolls)
    you are the one who ends up paying for a (cross) license.
    Further, amongst near equals, the costly patent enforcement
    game reduces to MAD (mutually-assured destruction).
    Biotech companies learned this a long time ago,
    when they realized that it makes little sense to
    sue each other over drug-enabling tech even before
    FDA approval, which is the true gating function which
    confers the desired monopoly and knocks the other
    out of the ring.

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