NetApp Picks Up Auspex Patents

Bids $9M for busted NAS vendor's portfolio of 50-plus patents. What's it gonna do with them?

June 17, 2003

3 Min Read
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Network Appliance Inc. (Nasdaq: NTAP) has entered a winning bid of $8,975,000 for the 50-plus patent portfolio of Auspex Systems Inc. (Nasdaq: ASPX), the pioneering NAS vendor that filed for bankruptcy in April (see Auspex Shuts Down and Auspex Files for Bankruptcy).

J. Michael Kelly, a partner at Cooley Godward LLP and head of the San Francisco law firm's creditors rights and bankruptcy group, is representing Auspex in its bankruptcy proceedings. He says NetApp's offer came at a court auction last Friday, June 13.

"We were pleased," Kelly says of the amount of NetApp's bid.

According to Kelly, other bidders for the Auspex patents included EMC Corp. (NYSE: EMC), Intel Corp. (Nasdaq: INTC), and Microsoft Corp. (Nasdaq: MSFT).

The Auspex patents cover a variety fundamental technologies used in NAS systems, including U.S. Patent No. 5,931,918 for "Parallel I/O network file server architecture." This patent, a continuation of one originally issued to Auspex in 1992, essentially describes the architecture of a NAS server, "comprising as separate processors, a network controller unit, a file controller unit, and a storage processor unit."Other patents granted to Auspex include:

  • "Fault-tolerant NFS server system and mirroring protocol" (No. 5,513,314, issued in 1996);

  • "Bridge for direct data storage device access" (No. 5,941,969, issued in 1999);

  • "Processing system with dynamically allocatable buffer memory" (No. 6,081,883, issued in 2000);

  • "Multiple software-facility component operating system for co-operative processor control within a multiprocessor computer system" (No. 6,065,037, also issued in 2000); and

  • "Intelligent virtual volume access" (No. 6,389,432, issued in 2002).

So, what does Network Appliance intend to do with this stash of NAS patents? Develop new products? Collect patent-licensing fees from its competitors? Keep them ?

It's not clear yet. NetApp spokesman Eric Brown was unable to provide any additional information about the company's plans for the Auspex intellectual property.

Larry Boucher, CEO of Alacritech Inc. who previously founded Auspex, is named on several of the patents. He says NetApp "certainly knows the patents better than most people" and speculates that the company may be interested in applying some of the technology to its own NAS systems.

"As far as I can tell, they have stayed away from Auspex's form of multiprocessing, as some of the patents cover that," he says. "This is a technology that they understand, and may be interested in making use of." He also says NetApp may seek royalty payments from other vendors.It's worth noting that some of the Auspex patents also list as contributors NetApp's two founders -- Dave Hitz, EVP of engineering, and James Lau, EVP and chief strategy officer -- both of whom worked at Auspex before starting NetApp in 1992.

Adds Boucher: "I suppose that there is always the possibility that they are doing it out of the goodness of their hearts, realizing where they came from, and just want to give something back."

Meanwhile, other pieces of Auspex are scattering to the wind. Storage consulting shop GlassHouse Technologies Inc. acquired around 330 NAS support contracts from Auspex last week, paying $280,000 in cash (see GlassHouse Picks Auspex's Bones).

Auspex's remaining physical assets will be auctioned on June 26, Kelly says.

Todd Spangler, US Editor, Byte and Switch

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