March 01, 2006, 11:08 AM — Storage rivals Quantum Corp. and Sun Microsystems Inc. subsidiary StorageTek have settled their three-year patent dispute and entered into a cross-licensing agreement, according to a statement issued Wednesday.
Under the terms of the deal, the two vendors will have license to a limited number of each other's patents on a nonexclusive, worldwide basis. Quantum has also agreed to pay Sun US$20 million this quarter and an additional $5 million over the next five quarters.
In April 2003, StorageTek filed a suit charging that Quantum's SDLT tape drives and media products used technology that infringed two of StorageTek's patents. The suit sought an injunction against the sale of these products and monetary damages of $142 million.
Sun, based in Santa Clara, California, acquired StorageTek in August 2005. The case against Quantum was set to go to trial this week.
Quantum agreed to settle after weighing the benefits of the licensing agreement against the legal costs it could incur and the potential damage on its business if it were to lose in court, according to a statement from Rick Belluzzo, chairman and chief executive officer of Quantum, based in San Jose, California.
