History 2002: Imation and Quantum Settle on DLT Cartridges

In the end, the battle between Imation and Quantum generated much smoke without a fire.

The 2 parties have finally shaken hands with an agreement that Quantum will ultimately pay only $5 million to Imation, over 18 months.

Furthermore, the parties have entered a multi-year business and supply agreement, the terms of which were not revealed, but which suggests that Quantum will quickly recuperate what it feels it is owed, through generous royalties for DLT cartridges made by Imation.

Recall that on October 1, 2001, Imation filed a lawsuit against Quantum (and Maxell) seeking “at least” $150 million and up to $450 million for violation of antitrust law and recovery damages essentially because the DLT specialist sought to obstruct the tape manufacturer from making DLT media, by means that were unclear to say the least, no doubt under pressure from its 2 other media makers, Fuji and Maxell.

Quantum parried 2 days later with a countersuit for misappropriation of trade secrets, misleading advertising and unfair business practices.

A Santa Clara, CA court, however, later denied Quantum a temporary restraining order to prohibit the sale of Imation’s DLT media, awaiting more arguments.

During that time, Imation continued its production and sale of the DLT IV cartridges, all the while paying royalties (30%) to Quantum.

The latter would have been better off not suggesting that Imation’s production “failed our qualification,” given that validation will now be completed, apparently both for DLT and SDLT.

Imation CEO and chairman Bill Mohanan commented in a statement: “This settlement is a win-far-win for all parties.”

And more particularly, for the attorneys of both parties, we would add.

This article is an abstract of news published on issue 173 on June 2002 from the former paper version of Computer Data Storage Newsletter.