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Patently Profitable

6:20 PM -- We live in litigious times -- at least, here in the U.S.; and it seems the tougher the market gets, the more familiar companies become with the inner workings of the justice system. As one analyst put it in a recent conversation, "Storage is a boom industry for the legal profession!"

There's a lot to go to court over: Regulatory issues, stock option disputes, class actions, and, of course, technology tussles of the kind recently settled between Dot Hill and Crossroads Systems. (See Crossroads, Dot Hill Ponder Patents.)

Some may find Crossroads' situation a real yawner, but in my view, it highlights a point worth considering. Crossroads, like many tech suppliers have done, is targeting companies for penalties and royalty payments linked to its patents.

Indeed, Crossroads is making a company strategy out of finding and engaging involuntary licensees. CEO Rob Sims boasts that his firm's "intellectual property campaign" is just getting underway. The company has won with Dot Hill and a few others, and Sims indicates that any other SAN device or switch vendor using Crossroads' "access controls" technique is fair game.

Is the road to riches paved with motions and countermotions? Some think so, and others disagree. Regardless, the strategy opens intriguing questions: What do specific patents cover? In a finished product, where does one vendor's technology begin and another's end? To what extent can a company base its business on making its claims in court?

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