• Data Network Storage Files New 337 Complaint Regarding Certain Data Storage Products
  • October 27, 2010 | Authors: Alexander E. Gasser; Eric W. Schweibenz
  • Law Firm: Oblon, Spivak, McClelland, Maier & Neustadt, L.L.P. - Alexandria Office
  • On October 20, 2010, Data Network Storage, LLC of Newport Beach, California (“DNS”) filed a complaint requesting that the ITC commence an investigation pursuant to Section 337.

    The complaint alleges that NetApp, Inc. of Sunnyvale, California (“NetApp”), Dell, Inc. of Round Rock, Texas (“Dell”), Xyratex, Ltd. of the United Kingdom, Xyratex International Inc. of West Sacramento, California, and Xyratex (Malaysia) Sdn Bhd of Malaysia (collectively, “Xyratex”), Dot Hill Systems Corp. of Longmont, Colorado (“Dot Hill”), International Business Machines Corporation of Armonk, New York (“IBM”), Cisco Systems, Inc. of San Jose, California (“Cisco”), and QNAP Systems, Inc. of Taiwan (“QNAP”) unlawfully import into the U.S., sell for importation, and/or sell within the U.S. after importation certain data storage products and components thereof that infringe U.S. Patent No. 6,098,128 (the ‘128 patent).

    According to the complaint, the ‘128 patent generally relates to a system configured to receive and store data, and allow for conversion of storage commands to and from a common format.  The complaint states that to implement this technology, the claims require a file management system configured to convert storage commands to and from a common format, a processor configured to execute commands in a common format, and a file device driver configured to redirect commands to the file management system.

    In the complaint, DNS alleges that Dot Hill imports and supplies components from Taiwan that are assembled in the United States into NetApp products and Dot Hill products accused of infringing the ‘128 patent.  The complaint further alleges that Xyratex imports and supplies components from Malaysia to NetApp and Dell, which are assembled in the United States into products accused of infringing the ‘128 patent.  DNS also alleges in the complaint that IBM manufactures and imports accused products from Mexico and rebrands accused NetApp products under the IBM brand.  The complaint additionally states that QNAP imports accused products into the United States from Taiwan, and that QNAP is an OEM supplier of accused products sold by Cisco.

    According to the complaint, DNS’s business model includes acquiring, licensing and developing patent portfolios, and DNS is the exclusive licensee of the ‘128 patent, with an exclusive right to enforce the ‘128 patent pursuant to an agreement with the owner of the patent, Storage Computer Corporation.  DNS asserts in the complaint that a domestic industry exists through its substantial investments in the exploitation of the ‘128 patent.  The complaint states that DNS substantially invests in research and evaluation of its computer data storage patent portfolio to identify licensing opportunities for, among others, the ‘128 patent, and that due diligence requires market research and analysis of publicly available information, requiring significant capital expenditures by DNS.  The complaint states that litigation involving the ‘128 patent resulted in eleven license agreements that specifically include rights to the ‘128 patent.

    As to related litigation, DNS states in the complaint that case number 3-08-cv-0294-K filed in the U.S. District Court for the Northern District of Texas involves the ‘128 patent, and NetApp and Dell are the sole remaining defendants in that action, while case number 3:09-cv-00658 pending in the U.S. District Court for the Southern District of California, involves the ‘128 patent and IBM is the sole remaining defendant.  DNS further states that on October 4, 2010, it filed case no. 10cv2060 in the U.S. District Court for the Southern District of California against Cisco, Dot Hill, QNAP, and Xyratex, apparently involving the ‘128 patent.

    With respect to potential remedy, DNS requests that the Commission issue a permanent exclusion order and a permanent cease-and-desist order directed at all proposed respondents and their subsidiaries, related companies, and agents.