NetApp Zaps BlueArc With Lawsuit

One month after Network Appliance Inc. (Nasdaq: NTAP) acquired the patent portfolio of bankrupt NAS vendor Auspex Systems Inc., it has turned around and sued BlueArc Corp., claiming BlueArc has infringed three of those patents.

NetApp filed the lawsuit in the U.S. District Court of Delaware on July 15, 2003. The suit asks for unspecified monetary damages and requests that BlueArc be enjoined from its alleged infringement, which NetApp asserts is "willful and deliberate."

"NetApp believes BlueArc has infringed our patent portfolio, and we are assertively defending our intellectual property," says NetApp spokesman Eric Brown.

Chuck Joseph, BlueArc's executive VP for marketing and business development, says the company believes NetApp's lawsuit is without merit. "We utilize our own innovations, which are covered by pending patents of our own," Joseph says, adding that BlueArc implements NAS functionality directly in hardware, whereas NetApp's systems do so in software.

Noting that the patents in question were originally granted to Auspex, Joseph says, "The lawsuit brought by them is not based on any technology developed by them."The three patents at the heart of the lawsuit -- U.S. Patent numbers 5,802,366; 5,931,918; and 6,065,037 -- were each granted to Auspex. Last month, NetApp acquired the Auspex patent portfolio in a court auction with a winning bid of $8,975,000 (see NetApp Picks Up Auspex Patents, NetApp Acquires Auspex Patents, and Auspex Shuts Down).

Patents 5,802,366 and 5,931,918 are both for "Parallel I/O network file server architecture." These patents, granted to Auspex in September 1998 and August 1999 respectively, essentially describe the fundamental architecture of a NAS server, "comprising as separate processors, a network controller unit, a file controller unit, and a storage processor unit."

Meanwhile, the contributors listed for Patent 6,065,037 -- for a "multiple software-facility component operating system for co-operative processor control within a multiprocessor computer system" -- include NetApp's two founders: Dave Hitz, NetApp's executive VP of engineering, and James Lau, executive VP and chief strategy officer. Both were engineers at Auspex prior to founding Network Appliance in 1992.

Representing NetApp is Howrey Simon Arnold & White LLP, a law firm specializing in intellectual property litigation.

BlueArc, a five-year-old company that last week announced it had raised a $47 million round of funding, sells high-end NAS systems that directly compete with NetApp's core products (see BlueArc Wallows in $47M Haul).BlueArc is not exactly a stranger to litigation. In May 2002, it sued four former employees who quit to start a new company called Exstor Systems for, among other things, allegedly stealing BlueArc's intellectual property. That case was settled out of court (see BlueArc vs. the Exstor 'Conspiracy').

Todd Spangler, US Editor, Byte and Switch