Slowly Dying Technology Goes for Gold With Patent Infringement Lawsuits

Jul 3, 2012

By Kerrie Spencer, staff writer – July 3, 2012

The International Trade Commission’s Chief Administrative Law Judge E. Charles Bullock has ruled that the two patents at the root of Overland Storage’s seven patent infringement lawsuits are valid. (1)(2)

The whole thing got started with one lawsuit, which mushroomed into something much bigger. Overland Storage, headquartered in San Diego, California first went after the German firm, BDT Media Automation. From there, they took aim at Quantum, Spectra Logic, PivotStor, Qualstar, Tandberg Data GmbH, Tandberg Data Corp and Venture Corp. A few of these names are not that recognizable in the U.S., as they are overseas. (1)(4)(5)(6)(7)(8)

This is an interesting case from the point of view that the tape storage technology sector has seen a recent decrease in demand as modern technology bites into their business with newer, more efficient and more advanced methods of storing data. (3) Some wonder if these lawsuits, although based on alleged infringement of valid patents, are not a way to secure money in the face of a potential business downturn. With these factors in play, it may be well worth watching how these cases take shape. Overland Storage is seeking royalties for their patented inventions and is attempting to stop all defendants from using its technologies in the U.S.

Interestingly, one business partner of Overland has stated quite bluntly that they were surprised Overland was launching patent infringement lawsuits for partitioning and exporting tape, as the technology is considered to be outdated. This perhaps adds more fuel to the fire for those thinking Overland is after the money and not so much a victory in court.

On the other hand, there are some statistics relating to this market that might make one think twice. By 2015, the tape storage market is forecast to exceed $12 billion in total revenue. Even more intriguing is the fact that the seven companies named in the lawsuits represent approximately 40 percent of that market. (2)

The two patents in question are numbers 6,328,766 and 6,353,581; referred to as patents ‘766 and ‘581. The first patent was awarded in 2001 and deals with the technology of partitioning a physical tape library into virtual tape libraries, with access only available to certain servers. The second patent was filed and registered in 2002 and covers a method for users to safely and securely import/export data cartridges in a tape library in a manner that would not affect the security of any other library operations. (1)

These two patents were at issue in the first lawsuit Overland filed against BDT, IBM and Dell. The president of Overland said IBM and Dell settled with the International Trade Commission before they were drug into court, which is usually a sign a company feels they do not have a legal leg to stand on, and did not want to lose more money than was necessary to make the lawsuit go away. Additionally, it is suspected IBM and Dell felt the patents were valid and recognized that it would look like they got caught stealing from the cookie jar when all the evidence came out in open court.

The initial success with their first lawsuit led Overland to chase the other companies on the list of seven. It certainly did not hurt their case when it was shored up by the International Trade Commission’s ruling that their patents were indeed valid. Those wanting to read the International Trade Commission’s ruling will have to wait for the redacted version to be released within the next few weeks. The Commission only gave their report on the ruling to Overland’s attorney and the BDT lawyer.

The seven businesses being sued are mostly remaining quiet, citing that since it is a legal matter they are loathe to comment but that they will defend themselves in court. And so it appears that the battle lines have been drawn over tape data storage, or magnetic tape data storage technology.

Magnetic tape data storage uses digital recording, on the magnetic tape, to securely store information. The most well known versions of magnetic tape are cassettes and cartridges, although these days, tapes are far scarcer than they used to be. The tape drive is what takes care of the actual writing/reading of any data.

Tape storage is often quite a bit less expensive than storing data on disk, or in other formats, and in fact has typically been used for larger computer systems. These days, tape storage is mainly used as a high capacity method that can handle up to 5 Tb, for archiving and backups. (9) Perhaps this technology is going the way of the dinosaur, and perhaps not, given that it is still in use in other forms. The most important thing to remember is that even if the technology may be on its way out, the newer versions of it were built on original Overland patents. And, let the battle begin.


4. Overland Storage, Inc. v. Quantum Corp. and Venture Corp. Ltd., Case No. 3:12-cv-01599
5. Overland Storage, Inc. v. Spectra Logic Corp., Case No. 3:12-cv-01597
6. Overland Storage, Inc. v. PivotStor, Inc., Case No. 3:12-cv-01598
7. Overland Storage, Inc. v. Qualstar Corp., Case No. 3:12-cv-01605
8. Overland Storage, Inc. v. Tandberg Data GmbH and Tandberg Data Corp., Case No. 3:12-cv-01604