NetApp Sues Sun Micro for Patent Infringement

Network Appliance said Wednesday it filed a patent lawsuit against Sun Microsystems, alleging Sun violated seven patents for data processing systems and software. NetApp is seeking unspecified compensatory damages, as well as a permanent injunction against future versions of Sun's ZFS storage software. NetApp also wants a ruling that it isn't infringing on three of Sun's patents, and wants the patents ruled invalid. Sun has not filed any lawsuits against NetApp. In a statement Sun said, "Many of the claims raised in the lawsuit are factually untrue," and added the lawsuit, "is a clear indication that NetApp considers Sun technology a threat and is a direct attack on the open-source community." NetApp executives said the company began to review its patents around 18 months ago, following an accusation of patent infringement and aggressive demands for licensing from Sun. The executives do not expect a settlement before a court ruling. Separately, Sun said Wendesday it will ask shareholders to vote on a 1-for-4 reverse stock split at the company's annual meeting Nov. 8. CEO Jonathan Schwartz said Sun's sub $10 share price mistakenly implies the company continues to struggle after the dot-com bust. Shares of Sun lost 2.4% to $5.37 on Wednesday; Network Appliance was unchanged at $28.22.

Sources: CNET, MarketWatch, Reuters, Wall Street Journal
Commentary: Sun Micro Changes Ticker to JAVA • IBM to Sell Sun's Solaris • Network Appliance Jumps on Strong Outlook, Buyback
Stocks/ETFs to watch: SUNW, NTAP
Earnings call transcript: Sun Microsystems F4Q07, Network Appliance F1Q08

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