Overland Sues Seven Tape Library Makers Over Alleged Patent Infringement

Overland Storage has filed suit against seven companies alleging that they infringed on two Overland patents related to tape storage technologies.

The new lawsuits come days after the International Trade Commission ruled in a separate lawsuit San Diego-based Overland Storage filed against Germany-based BDT Media Automation that the two patents in question are valid.

The new lawsuits were filed against San Jose, Calif.-based Quantum; Boulder, Colo.-based Spectra Logic; Irvine, Calif.-based PivotStor; Simi Valley, Calif.-based Qualstar; Germany-based Tandberg Data GmbH; Westminster, Colo.-based Tandberg Data Corp.; and Singapore-based Venture Corp.

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The new lawsuits are for alleged infringement of two Overland Storage patents.

The first, patent number 6,328,766, was granted in 2001 and focuses on technology for partitioning of a physical tape library into multiple virtual tape libraries that can be accessed by certain servers and not by others.

The second, patent number 6,353,581, was granted in 2002 and describes a method for users to securely import or export individual data cartridges within a tape library without impacting the security or other operations of the library.

This is the second time Overland Storage has filed patent infringement suits related to the two patents.

The earlier lawsuit was filed against BDT, as well as against IBM, which imported the BDT tape libraries that Overland alleged infringed on its patents, and Dell, which purchased the libraries from IBM, said Eric Kelly, president and CEO of Overland Storage.

In that case, IBM and Dell in November settled with the ITC before the case went to the courts, a move that Kelly said shows that those two companies viewed the patents as valid.

"IBM still imports the BDT libraries under agreement with Overland," he said. "I'm very happy with the relationship with IBM."

Some of the targets of the lawsuits filed Wednesday include those who make their own tape libraries, including Qualstar, Tandberg, Quantum and Spectra Logic, while many companies targeted by the lawsuits use libraries manufactured by BDT, Kelly said.

Kelly said Overland Storage's position in its lawsuits was strengthened by the ITC's release of a summary that found that the company's '766 and '581 patents were valid.

NEXT: Positive News On The Patent Front For Overland

Copies of that report were released only to the attorneys from Overland and BDT, and Overland's Kelly said not even he is allowed to read it. A redacted version will be released in a few weeks to explain the ruling. "But, our counsel did say it would be positive news for us. So, now I have to sit on pins and needles to see what that positive news is."

Jeanne Wilson, president of Condor Storage, a Sedona, Ariz.-based solution provider and Overland Storage partner, said she was surprised to hear about the lawsuits.

"I don't know why Overland would be going after people for partitioning and export of tape," Wilson said. "Those technologies have been out for so long."

With the financial struggles the companies faced over the last couple of years, Wilson also questioned the timing of the lawsuits. "To take on major lawsuits against major manufacturers might be troublesome for Overland," she said.

Kelly said his company took its time trying to negotiate with its competitors over the patented technologies.

"The Overland Board of Directors is a very professional, mature Board," Kelly said. "Their last resort is to file a lawsuit against competitors. They came to the realization that discussions were not going anywhere. At some point, you have to do the right thing for the shareholders, for the employees and for the customers."

Kelly also said Overland is no longer the struggling company it once was. When Kelly started at Overland in 2007, the company had a share price of about 25 cents per share and a market capitalization of about $3 million. Per-share prices on Friday rose 8.7 percent to reach $1.88, giving the company a market capitalization of nearly $52 million.

"I think with new products coming, and with some new people on our team, we will grow," he said. "We'll be around. I don't think there's any question about that."

NEXT: Companies' Responses To Being Served

A Quantum spokesperson said the company is declining to comment on the specifics of the lawsuit except to say that it is well-positioned to defend itself and will do so. The spokesperson also said Quantum is confident its customers will not be impacted.

A Qualstar spokesperson said the company had not yet been served papers, and so had no comment at this time.

Spectra Logic, in a statement, responded, "Spectra Logic is aware that Overland has filed lawsuits in the San Diego federal court accusing Spectra Logic and others of infringing two of its patents. ... Spectra Logic has a policy of respecting the legitimate patent rights of others and also a strong policy of aggressively defending itself against unwarranted charges of patent infringement. Overland has not previously notified Spectra Logic of any alleged patent infringement, and therefore Spectra Logic intends to study the newly filed lawsuit and to investigate Overland's contentions in light of the ITC's ruling."

PivotStor and Tandberg Data did not respond to requests for comment on the lawsuits by press time.

PUBLISHED JUNE 29, 2012

This story was updated on June 29, 2012, at 5:00 p.m. PST to clarify company names and details of what they disclosed.