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Technology Stocks : Son of SAN - Storage Networking Technologies -- Ignore unavailable to you. Want to Upgrade?

To: w2j2 who wrote (4600)	8/14/2002 10:48:35 PM
From: Gus	Read Replies (2) \| Respond to of 4808

Another funny moment from Reyes, if somewhat incriminating and incredibly stupid. McData's lawyers are probably going to be all over this cavalier statement. Reyes highlighted the importance of this software, stating that Brocade’s frame filtering capability is the “only technology available in the industry that offers this functionality.” This is the feature at the center of the company's ongoing patent litigation with McData Corp. In court in July, “their own witnesses enforced the capabilities of our frame filtering technology,” said Reyes, “and these capabilities predated McData’s patent -- they are in our core ASIC... We are extremely pleased with the results, and we are confident justice will prevail.” byteandswitch.com Is this statement incredibly dumb or what? I read some parts of the transcript and McData's witnesses did no such thing even though Brocade lawyers tried as best as they could to make them do so. But that's beside the point. Reyes is now boasting that Brocade's frame filtering technology is based on technology that predates McData's patent, but this is a rather bizarre form of logic that may just have opened a new can of worms for Brocade. 1) McData's '236 patent was filed on 1/12/99 and issued on 5/15/01. 2) Brocade's only patent applications before 1/12/99 were its '813 patent (filed 3/21/97; issued 12/12/00) and its '612 patent (filed 6/19/98; issued 03/05/02). 3) As of 1/12/99, Brocade had no utility patents and 3-5 patent applications while McData had 15-17 utility patents and 5-10 patent applications. As of today, Brocade still has only 3 utility patents and around 7 patent applications while McData has 26 utility patents and 25 patent applications. Obviously, if Reyes had a sound basis for claiming that its frame filtering technology predated McData's version, which was first filed in 1/12/99, then his lawyers would have responded to the McData patent lawsuit with a counter-lawsuit also alleging patent infringement, which is actually typical in patent infringement lawsuits. To do anything less would be legal malpractice. In fact when McData sued Brocade for the first time in early 1998, Brocade promptly responded with a counter-lawsuit also alleging patent infringement even though Brocade did not have any utility patents at that time and its patent applications were still making its way at the USPTO. But Brocade's lawyers could not do so in this case as much as they wanted to because Brocade simply does not have the right patents and it appears that Brocade does not even have the right patent applications covering this technology at the USPTO!!! In fact there was a rumor a few years ago that Brocade was finally forced to withdraw several patent applications at the USPTO because it kept on running into prior art not only from McDATA. The other notable lines of defense that Brocade employed at the injunction hearing was this novel if somewhat tepid notion that the US patent system is a first to implement system and not a first to file system, but nice try. Even Brocade's lawyers tried harder to keep themselves from looking stupid before the judge without Brocade noticing than pressing this trivial issue which is really tangential to the main issue of infringement: Does McDATA have the right to exclude Brocade and others from using its basic frame filtering technology and did Brocade infringe on that specific right? The doctrine of equivalents is not even an issue in this case because Brocade simply does not have the patent... and they're just beginning to understand the full implications of not having it or anything similar to it. Brocade also tried to argue that McData agreed never to sue Brocade over *future* patents in the 1998 settlement, but McDATA's lawyers made Reyes look stupid by making him admit that the 1998 patent dispute was resolved in a formal written settlement which DID NOT include what would have essentially been a major waiver of McDATA's own patent rights and the patent rights of the other major owners of (IBM, EMC) key SAN (ESCON, FICON, Fibre Channel, iSCSI) patents.