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Crossroads, Dot Hill Ponder Patents
Posted by
Mary Jander
July 07, 2006
A recently settled lawsuit between Crossroads Systems and Dot Hill reveals how intellectual property can act as a spur or a detriment to storage suppliers.
To recap: On June 28, Crossroads declared victory in its lawsuit against Dot Hill and Infortrend, which supplies RAID controllers to Dot Hill. (See Dot Hill Settles.) Terms of the settlement include a $10.5 million payout to Crossroads for alleged damages, $3.35 million of which will come from Dot Hill and $7.15 million from Infortrend.
Additionally, Dot Hill will pay royalty fees in the amount of 2.5 percent of net sales on RAID products sold in the U.S. that are based on Crossroads' "access controls" patents. Infortrend will pay most of the royalty fees for Dot Hill's RAID products based on Infortrend controllers, with Dot Hill responsible for 0.8125 percent of the 2.5 percent fee.
Crossroads is in the process of getting its patents accepted in Europe. Once accepted it can charge Dot Hill and others for products sold outside the U.S.
The litigation has been an ongoing trial to Dot Hill, which has had other issues to face as well. (See CEO's Over Dot Hill and Dot Hill Faces Suit .) But it has apparently encouraged Dot Hill to speed development or procurement of an alternative controller technology, according to company spokesperson Erin Lutz. What's more, the vendor today announced that it's been awarded its own patent for "controller data sharing," which it will not promote as a licensable technique. (See Dot Hill Wins Patent.)
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