NetApp Smacks Sun With Patent Suit

Network Appliance is suing Sun Microsystems in a Texas district court, claiming the intellectual property Sun has released in its open-source ZFS (Zettabyte File System) software violates seven NetApp patents.

NetApp called a press conference September 5 to explain its position. We firmly believe that everyone is best served by fair and responsible treatment of intellectual property," said Dave Hitz, NetApp founder and EVP, who took the call with CEO Dan Warmenhoven. "Sun's actions have been neither fair nor responsible."

According to NetApp, Sun approached company management about 18 months ago with demands that NetApp license Sun's intellectual property as held in a number of patents Sun acquired with its 2005 purchase of StorageTek for $4.1 billion. The NetApp execs won't say how much Sun demanded in payment, but Hitz's most recent blog indicates royalties would have amounted to "millions of dollars."

In doing research to respond to the allegations, NetApp officials say they found what they believe to be clear evidence that, not only were they not in violation of Sun patents, but that Sun was violating seven NetApp patents. Specifically, NetApp thinks Sun's using patented technology first introduced in NetApp's foundation file system, Write Anywhere File Layout (WAFL), and in NetApp's RAID subsystem.

"Our suit points out that Sun’s ZFS appears to infringe several of NetApp’s WAFL patents," states Hitz in today's blog, which details specifics of the case. "It looks like ZFS was a conscious reimplementation of our WAFL filesystem, with little regard to intellectual property rights."When NetApp presented Sun with its position last year, Warmenhoven says, talks got nowhere, and by April 2007, Sun wasn't answering calls about the issue. Hence the lawsuit.

Sun is ready to counter NetApp's allegations with ones of its own. Late in the day Sept. 5, Sun released the following statement:

Meanwhile, NetApp's proceeding full bore to court in Lufkin, Texas, a venue chosen, Warmenhoven says, for its previous speedy settlement of patent lawsuits.NetApp is seeking an injunction against Sun for distributing ZFS and also an unspecified amount of damages. "We'd like to see them stop developing and distributing ZFS and stop doing derivative work with it," Warmenhoven said today. "Our primary objective is the injunction."

Sun's ZFS adds file system and storage capabilities to the vendor's Solaris operating system. Sun released it with Solaris in mid-2006 -- an action that Hitz labeled "reckless," since it occurred after Sun was made aware of NetApp's position.

If NetApp succeeds in its suit, there could be ramifications not just for Sun but for third parties that have adopted Sun's open-source software for use in commercial products. "NetApp believes Sun unfairly distributes ZFS technology to third parties to induce the adoption and distribution of the infringing technology in their products without informing them of applicable NetApp patents," states NetApp's press release.

Hitz and Warmenhoven refuse to name specific third-party products that allegedly violate patents, but they stress they're not after anyone who's not using ZFS commercially. "We are not interested in people using ZFS for research," Hitz said.

The NetApp execs hope the case will be settled within the next year or so. Still, the process has yet to begin, and it's tough to determine any timelines, or to tell the impact the litigation and possible trial will have on either party or the market in general.At close of trading today, Sun's shares were priced at $5.37, down $0.13 (2.36%}. Shares of NetApp were unchanged, trading at $28.22.