Rival SAN switchmakers Brocade Communications Systems Inc. (Nasdaq: BRCD) and McData Corp. (Nasdaq: MCDTA) have called a halt to a longstanding patent dispute. But it's not clear whether the truce will last.
In a document filed with the Securities and Exchange Commission (SEC) today, McData says it's struck a confidential agreement with Brocade in which the two companies will dismiss claims in a civil suit that's been ongoing in U.S. District Court in Colorado since February 2002. Terms include a three-year "standstill" in patent litigation by both sides. No patent licensing is involved.
Is all forgiven and forgotten? While current claims have been dropped, the filing makes it clear that litigation will halt for three years. After that, it's technically possible that issues could resurface.
The technology market in general is fraught with patent litigation, and storage networking has its full share. At least one expert says he sees no letup in the volume of suits and countersuits. "Things have been heating up more very recently, within the last half year. Before that, the trend seemed to be toward settling," says Brian Johnson, an attorney with the Cleveland-based firm of Calfee, Halter & Griswold.
Johnson says he can't say whether the upswing in technology litigation mirrors the macroeconomic situation, but it's a possibility. "Before the bubble burst, no one was settling. Then they had no money to support ligitation." The recent market uptick could be giving companies the resources to follow through.
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