Sun Patent Team Demanded $36 Million From NetApp

Part of Jonathan’s response to our lawsuit stunned me. He simply denied our account: “First, Sun did not approach NetApps about licensing any of Sun's patents and never filed complaints against NetApps or demanded anything.” (Our name is actually NetApp, without the ‘s’, but I didn’t want to edit his quote.) 

He says Sun never “demanded anything”, but here is an e-mail from Sun’s lawyers doing exactly that. Legal language can be tricky to understand, but the translation of Sun’s letter is “You infringe our patents, so pay us $36 million.”

The part about “mapping claims onto NetApp products” is the legal way of saying “you infringe our patents”. The statement that NetApp apparently believes “the best defense is a good offense” indicates that we had something to defend against. Indeed. The phrase, “over a year and a half ago,” shows that the attack had been going on for a long time, both from StorageTek prior to the acquisition, and continuing at Sun long after the acquisition. 

It’s true that Sun lowered its price as the implications of our WAFL patents began to sink in, but it amazes me that Jonathan would simply deny that Sun ever demanded anything, and would imply (in the name of his URL) that NetApp is somehow the patent troll here.

[Note: Sun has now countersued. See Jonathan’s blog post announcing that, and my response.]

Comments

[Dave Hitz]

Some of the comments on my previous blog made me realize how difficult legal letters can be to understand, so I put more effort into "translating" it into English.

[JohnQ]

Dave-

The language in Sun'e email was not difficult to understand, and your "translation" seems little more than another attempt to spin things in your (NetApp's) favor.

My question still stands:

What specifc patents was NetApp originally attempting to buy from StorageTek, and why?

It was NetApp's original attempt to purchase the patents that prompted Sun to reply with (to paraphrase) "no, you can't buy the patents 'cause they're not for sale, but since you are obviously already using them in NetApp products we requilre that you license them for $36 million"

You seem intent on trying to paint this picture of poor, innocent NetApp minding its own business when all of a sudden, without warning, big bad Sun comes crashing through the door demanding $36 million.

NetApp intiated this whole chain of events by attempting to buy these patents from StorageTek in the first place. I'm not saying Sun is without fault, but trying to play the innocent victim card here is just not cutting it....

So again Dave, what StorageTek patents was NetApp attempting to purchase, and why? They were obviously strategically important to your company or else you wouldn't have tried to buy them outright.

So waddaya say Dave? Why not tell your customers the _whole_ story, instead of just the bits and pieces that make you look good and Sun look evil?

And just to keep all this in perspective, exactly who is suing who? Seems like NetApp is the one threatening (and following through with) legal action. To date Sun has not threatend or intiated ANY legal action against NetAPP. All you've got is a letter from Sun asking you to come to the table to discuss the issue.

In the evil patent troll sweepstakes, so far it's NetApp: 1, Sun: 0

-- JohnQ

--------------------------------------------------------------
You paraphrase Sun’s letter like this: “… since you are obviously already using [our patents] in NetApp products, we require that you license them for $36 million.”

My dictionary lists “require” as a synonym for “demand”, so I think we both interpret the letter as Sun demanding (or requiring) that NetApp pay $36 million.

My frustration with Jonathan’s blog is that he simply denied the truth! This is a demand letter from Sun’s lawyers to NetApp, and he denied having ever demanded anything. Of course he can share his point of view, but why not stick to the truth?

I won’t debate every detail of our case in public (that’s what the courtroom is for), but I’m happy that we could find some agreement.

-- Dave Hitz

[David Hopwood]

Make that NetApp: at least 2 (the other is BlueArc), Sun: at least 1 (Azul Systems), that I know of. Sun also sued Microsoft for patent infringement over Java, but there were other complications in that case.

[solaris]

lets see, Sun gave the world NFS, XDR(the catalyst for NDMP), Java, etc....not to mention simply the best hardware and OS( not to mention the most secure) in the world.

What has Netapp contributed?

Sun realized, via the embracement of open source, a company-run team of programmers cannot out-think the world, maybe the masses aren't as experienced, but they have good ideas. The ones that pass the muster get incorporated into supported software. WE, ALL!! move forward and customers see immediate benefits.

Nobody wants to admit it, but software will all be free in ten years.

The software sales channel will die just like the aluminum siding salesman, its all about designing, implementing, and supporting.

who can deliver the "promise" the best?

[Meredith Poundstone]

Your intepretation of that letter is moronic - and in no way justifies filing patent litigation in Texas! You just make yourself look like a troll. I'm afraid I'm with most of your other readers - I'm removing you from the list of vendors I deal with, and starting to look far harder at Sun and ZFS. I'm very disappointed in you guys.

[max]

I'm going to be covering a lot here, but let's start with Mr. Q.

Johnq:

"What specifc patents was NetApp originally attempting to buy from StorageTek, and why? "

Not saying it didn't happen, or that it's not a routine part of business, but the whole "Buy Patents from StorageTek" Has actually yet to have been proven. The only person stating this happened has not done so in a court filing, only on a blog.

"Seems like NetApp is the one threatening (and following through with) legal action."

Pardon my French, but boo-fscking-hoo.

Obviously NetApp wasn't the first to "threaten" legal action, my guess is they called Sun's bluff and raised them $20. What would *you* do if you were getting squeezed by a much larger competitor with a track record of being at the least tone deaf, and at the worst a patent troll themselves.

Dave Hopwood:

"Sun gave the world NFS, XDR(the catalyst for NDMP), Java, etc....not to mention simply the best hardware and OS( not to mention the most secure) in the world."

As a longtime Solaris user, I say hogwash.

Having a telnet vulnerability (Solaris 10) in a modern operating system kinda steals your most "secure OS in the world thunder."

Sun's NFS was not very good, It wasn't until it was standardized that Companies like NetApp could spend cycles writing implementations that were high performance. If NFS wasn't released as a standard, Linux would have never adopted it, and something better like AFS would be your defacto Unix file sharing protocol.

Sun has never been a storage "innovator". They rent out Hitachi at the high end, and they've always relied on other folks to do the heavy lifting in the File System department (veritas etc.)

I would suggest everyone lay off the Sun kool-aid for 5 minutes and discuss the issues instead of sniping on irrelevant topics like the court venue, how dreamy Schwartz is, or to try to interpret Sun's letter as anything but a threat.

[Anonymous Employee]

I'm a Net App employee, and I'm disgusted by my own company's leadership. Patents are for people too afraid to compete on innovation, and your explanations of our actions are totally condescending.

-- Anonymous Employee

--------------------------------------------------------------
I’m sorry you feel that way.

If you'd like to chat, either anonymously by e-mail, or in person, you know how to reach me.

-- Dave Hitz

[max]

'm a Net App employee, and I'm disgusted by my own company's leadership. Patents are for people too afraid to compete on innovation, and your explanations of our actions are totally condescending.

It's "teh suck" for sure, but imagine how the Azul employees felt...

http://www.networkworld.com/weblogs/datacenter/011521.html

[mathrock]

Regarding the Azul legal case, the General Counsel from Sun posted a blog, back in June 2007, about litigation and intellectual property using the Azul case as an example. The post seems extremely poignant given the current NetApp/Sun trouble.

http://blogs.sun.com/dillon/entry/on_litigation_azul

[max]

I tend to view this as the Azul case in reverse.

Sun could not have developed ZFS fast enough without borrowing heavily from someone else's trade secrets.

Not suggesting he's evil or anything (Far from it) but didn't this ZFS developer:

http://blogs.sun.com/ahrens/

Intern with NetApp and work on WAFL related technology?

[Rich Dworsky]

I’m sorry you feel that way.

If you'd like to chat, either anonymously by e-mail, or in person, you know how to reach me.

-- Dave Hitz

Re: the above?

why, so he/she can find himself having a one sided conversation with Netapp legal and HR?

I hate to break it to you Dave, but Netapp ain't Oz anymore, hasn't been for looong time and has quite a well earned reputation for its often mean and petty treatment of employees, internal politics, and classic legacy player treatment of customers.

[Jody]

Why Lufkin? Why not contact Jonathan directly before releasing the lawyers?

[JohnQ]

Dave Hitz wrote:

--------
"My dictionary lists “require” as a synonym for “demand”, so I think we both interpret the letter as Sun demanding (or requiring) that NetApp pay $36 million.
========

Yes, but "demand" sounds so much nastier and evil doesn't it? Especially when you use it as the sensationalized title of your blog entry.

To make a silly (but acccurate) anaology: suppose I go to McDonald's and order a BigMac and the kid behind the counter says "that'll be $3.50" Do I run to my blog and post:

= MCDONALD'S EMPLOYEE *DEMANDS* ALMOST $4.00 FOR A BIG MAC!! =

Factually, that's true. But we all can see it as sensationalized, out-of-context, and self-serving.

And while we're dabbling in semantics and playing word games, Jonathan's response stated:

"Sun did not approach NetApps about licensing any of Sun's patents and never filed complaints against NetApps or demanded anything."

Fact: Sun did not *approach* NetApp. They simply *responded* to your attempted patent purchase.

Fact: Sun never *filed* complaints against NetApp.

And depending on what dictionary you use ,

Fact: Sun did not *demand* anything, they *requested* it :-)

Yes, the above is a petty and ridiculously literal interpretation of specific words, but hey that's the game NetApp (and Sun) appear to be playing.

----
My frustration with Jonathan’s blog is that he simply denied the truth!
----

Umm. No, he didn't. At least not according to my dictionary :-) (see, aren't word games fun!)

---------
This is a demand letter from Sun’s lawyers to NetApp, and he denied having ever demanded anything.
--------

An outside observer (like myself) could just as easily see it as a letter in response to NetApp's ongoing pursuit of buying several STK patents, where Sun is indicating that the cost of licensing said patents is $34mil.

-------
I won’t debate every detail of our case in public (that’s what the courtroom is for)
-------

Right. But you have no problem choosing sensational (and arguably misleading) language in your blog postings, and taking a single email OUT OF CONTEXT and waving it around as incontrovertible proof that Sun is an evil, lying bully out to harm poor, innocent NetApp.

I'm not trying to pick a fight with you Dave, but you HAVE to see how your last 3 blog entries come across as a thinly-veiled PR smear campaign trying to drum up sympathy for your company. You seem to be going out of your way to paint a picture of a pure, innocent NetApp valiantly trying to defend itself against the greedy, arrogant, and (wait for it...) DEMANDING Sun Microsytems Patent Gestapo.

Reading all the angry posts from your customers on this blog, it's painfully obvious that nobody' is buying this partiular line of b.s.

The facts remain unchanged, no matter how creatively you spin and dance to gain favor in the court of public opinion:

1. NetApp initiated an attempt to gain ownership of several STK patents. (Still no insight from your company as to what those juicy little patents were...hmmm)

2. Sun responded with their "requirements" for licensing those patents. (from my dictionary, not yours)

3. NetApp responded by filing a patent infringement suit against Sun - in East Texas , a district infamous for handing down favorable rulings to patent trolls.

Don't you see how ignoring fact #1 while simultaneously trying to spin fact #2 as an unprovoked attack by Sun might come across as a little..um...sleazy? Did you think no one would see through the PR spin here?

And then add in the East Texas factor and things really start looking bad.

I think NetApp really has to reconsider what possible gains might come out of this vs. the obvious negative customer backlash you are already attracting.

[Richard]

Dave,
This is going to be more about open software than ZFS related patents.
You & your lawyers may want to do some more reading on

http://uwsg.iu.edu/hypermail/linux/kernel/0010.0/0343.html

... and stop taking a cynical advantage of a very sick US patent system.

It is morally correct to withdraw, before it is too late.

[max]

JohnQ

"1. NetApp initiated an attempt to gain ownership of several STK patents. (Still no insight from your company as to what those juicy little patents were...hmmm)"

This accusation has only been made by Schwartz, and if you read Robin Harris' blog (storagemojo.com), probably not exactly 100% true. Note that he doesn't necessarily support NetApp's claims etiher.

"2. Sun responded with their "requirements" for licensing those patents. (from my dictionary, not yours)"

See how Sun treated Azul, and you'll find that Sun's method of communicating "requirements"is essentially making demands and threats.

"3. NetApp responded by filing a patent infringement suit against Sun - in East Texas , a district infamous for handing down favorable rulings to patent trolls."

Also see the Azul case. Sun proponents keep harping on this point as if it actually meant anything, which indicates to me that Sun's smear campaign doesn't even want to touch on the facts of the matter.

What is very interesting is that my question to Schwartz regarding the Azul case never made it his blog. That indicates to me that Sun is being more selective with it's negative blog postings than NetApp, which certainly demonstrates who's being the more open party here, as that case contradicted Johnathan's statement that

"We're all focused on innovation and winning customers, not litigation."

By suing Azul, I suppose they were focused on "innovation" and not litigation?

Who exactly is the patent troll here?

As a customer of both NetApp and Sun, I clearly see Sun as being the initiator of this nonsense. Not saying NetApp smells like roses, but they certainly are the innovator when it comes to storage; Not Sun.

[Travis Roberts]

with all this talk of waving letters around, Dave, I have this mental image of you as Joe McCarthy, except you don't have a list of communists in the state dept but a list of threats from Sun.

[blogs]

Why this site is called blogS.netapp.com? I can see only one blog here. What a one person company...

[David Hopwood]

"max" attributed the following to me: "Sun gave the world NFS, XDR(the catalyst for NDMP), Java, etc....not to mention simply the best hardware and OS( not to mention the most secure) in the world."

I did not say this; "solaris" did (and I would certainly never describe the Solaris OS as "the most secure OS in the world"). The "Posted by:" lines apply to the post above, not the post below. Yes, it is easy to get this wrong; blame the TypePad style designers.

--David Hopwood

[Marin Debelic]

Hi Dave,

This NetApp/Sun patent affair is really heating up...I've read your posts with great interest and I would appreciate if you could clarify a few points for me:

1) How do you comment SUN's remark that you merely "threw a few patents over the wall"? SUN says that NetApp didn't provide for a "claims chart" which demonstrate how ZFS infringes your patents. Is this true? If yes, why didn't NetApp provide this if their infringement is so evident?

2) SUN is arguing that one of your claims includes a NVRAM (a non volatile mean of storage) as fundemental element, while they never use it. How do they infringe this claim?

3) In a previous post you mentioned that one of your patents describes the "copy on write" technique (COW)which is used both by WAFL and ZFS. I had a look at the patent and apparently the "copy on write" technique is cited as Prior Art i.e. as something known prior to your patent and something which shouldn't be an exclusive of either NetApp or SUN. Have I understood well?

thanks in advance,

Marin

[max]

The "Posted by:" lines apply to the post above, not the post below. Yes, it is easy to get this wrong; blame the TypePad style designers.

Whoops! apologies to Mr. Hopwood!