Patent Law: EMC vs Zerto, sometimes it’s “personal”

It seems like the last few years  have seen a plethora of lawsuits between major players against smaller competitors who have started to encroach upon their business. I have written about Symantec vs Veeam/Acronis in the past and I continue to have a keen interest in the use of patent infringement law and its deployment as a weapon against competitors. Let me preface the following by saying that a company has every right to litigate against another that infringes upon their intellectual property. I do believe that there are legitimate cases to be made for infringement, but I also believe that the process in which overly broad patents are awarded is broken to the point that its harmful to innovation and a competitive and open playing field for businesses today. Patent trolls continue to abuse the system and are a significant problem that has yet to be addressed fully.

But what really gets my goat:

Is selective patent enforcement. I believe that if anyone infringes on your licensed intellectual property and you bring suit, then you should not be only able to selectively enforce the patents against a select group. Meaning, if two companies are infringing on your technology you should have to sue both of them, not just the one you want to punish.  Also, if let’s say Company A has a technology that they license to Company C, and it infringes on say Company B’s technology  then Company A should be on the hook for legal costs associated with any suit. This tends to not be the case in many instances, especially in manufacturing where contacts will have liability limit clauses.

If it sounds convoluted and confusing, it kind of is. Legal fees for a basic defense can rack up quickly into the multi-millions, and in many cases the only group who comes out on top financially is the attorneys who get to reap hundreds of hours of fees as well as payments to legal experts who testify.  The perceived tendency is for both parties to reach agreement without going to trial, as it saves considerably on costs, but there are always those cases where one company will refuse to settle regardless of benefit, and are using the legal system to put a company out of business or punish them. Sometimes it’s not even due to any loss of business, it’s simply personal

Time for some rank speculation on my part:

Now as for EMC vs Zerto: reading through the initial filing, I think the case could be made for an infringement claim on its face, but I think it could also be “personal”. I have friends who work at both companies, so it’s one of those delicate situations to discuss. Also, the problem with a simple filing is that it provides only one side of the story and so far I’ve not seen any legal response to the initial filing so its hard to see where both parties are coming from.

Sometimes you can read through the lines to get the general impression of whats at stake. The simple  story revolves around 3 patents all stemming from Recovery Point Manager which is an EMC product that both of the primarily founders of Zerto worked on while at EMC. I think the key factor here is that EMC bought Kashya (where the Zerto Founders came to EMC) and in turn own certain technologies that EMC is stating that Zerto is infringing upon.

To me, a case like this should be pretty straight forward and will hinge on independent code review to see if the technology indeed infringes.  Still, I can’t help but think that Zerto isn’t cutting too much into EMC’s bottom line (I’d think more VMware and their SRM product), but given the history of the relationships between the parties involved, this may just be “personal”.

I’d hazard a guess that the vast majority of people who read this had no idea that the two companies were engaged in legal processes, and I have not seen much if anything in the trade press regarding this suit. It was only brought to my attention via discussion on twitter. Technology is a tough business, stuff like this makes it tougher. I’m interested to see where this goes because I know a lot of people like the Zerto product, and they have gained significant momentum with their Best of VMworld 2011 win. I will simply have to wait and see what comes next.