Monday Oct 29, 2007

The NetApp Litigation (continued)

Today, we filed a second complaint against NetApp for infringement of six additional patents and other related claims. Although it may appear a separate case, it is in reality, part of the same litigation originally brought by NetApp in Eastern Texas to impede the adoption of ZFS. There are many theories as to why NetApp chose this particular venue, but because they sued Sun in that location we were forced to respond there. And, that is what we did last Thursday.

The case we filed today is in the Northern District of California. While we dislike the fact that we are forced to litigate this matter at all, we believe California is a more appropriate forum for any dispute between Sun and NetApp. Why? For starters, our companies are headquartered less than 10 miles apart here in Silicon Valley. All of the key witnesses in this case are located here, as are our attorneys. The same for most of the documentary evidence. And, almost all of the technology in dispute was developed here as well.

So to us, it makes more sense in terms of efficiency and economy, that this case be litigated here. With this in mind, we will be bringing a motion before the court in California asking that the case filed in Texas be consolidated with the case filed by Sun today for trial here in the Bay Area. Bottom line, this move would be in the best interest of all parties involved...especially our respective shareholders. We hope that NetApp agrees.

Thursday Oct 25, 2007

The NetApp Litigation

The shift from “proprietary” to “open” business models continues to accelerate. Nowhere is this more apparent than with software. Sun went through this transition several years ago. It was a difficult undertaking (a serious understatement). However, we saw the direction of the industry and committed the company to the transformation. It's probably one of the most important and positive decisions we've ever made. Unfortunately, for some companies this same course remains unthinkable.

Last month, Network Appliance (NetApp) sued Sun alleging that Sun's ZFS technology infringed NetApp patents. Today we filed our response. A PDF copy can be found here.

We had no notice of NetApp's intent to bring this litigation and found it strange that they chose this course so unexpectedly. We were also surprised by NetApp's attempt to impede the adoption of ZFS. Obviously, they have business reasons why they believe they need to so so; however, ZFS was announced over three years ago. It has been in the open source community since November, 2005. So, why now?

We invest an enormous amount of money on innovation – on average 15% of revenue. As part of this, we also invest in various intellectual property protections for this innovation, including patents, copyrights and trademarks. This investment allows us the flexibility to protect ourselves and others. In this case, we intend to use our very broad and extensive patent portfolio to protect the open source community that has embraced ZFS and made it so successful.

I've previously shared my perspective on litigation. The points I made then apply equally to this case, including that a non-judicial resolution is always preferable. To this end, previous to filing our response, I spoke to my counterpart at NetApp. We had a very polite and engaged discussion about what lay ahead for both companies. However, in the end, we were not able to see a path to resolution.

We have reviewed the NetApp claims against ZFS and we believe them to be without merit. (To those of you who have already been sending us prior art - “thank you”. To those of you who would like to lend your support, please go here.)

In our response we address not only the case brought by NetApp, but we have also brought our own claims against the entirety of their product line and are seeking both damages and injunctive relief. It's a responsive action we take not because we want to, but rather because we are forced to. That said, we would like to use this litigation not only to protect, but to promote innovation as well. To this end, we have announced that we will be donating a portion of whatever Sun recovers to organizations supporting the open source community.

It is disappointing that we have to turn to litigation. But, it's clear that NetApp views the open source world much differently than Sun. We've made the transition – they can't contemplate it.

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