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Tuesday, October 02, 2001
Imation Files Suit Against Quantum


Imation Corp. filed an antitrust lawsuit on Monday against Quantum Corp. asserting price fixing and conspiracy to monopolize the production and sale of data storage tape for use with Quantum's DLT tape drives.

"...The lawsuit, filed in federal court in St. Paul, seeks damages of at least $150 million, which could be tripled under federal antitrust law. Imation also wants Quantum barred from further antitrust law violations. ``We have taken legal action to protect Imation and users of digital linear tape products who have been subjected to the illegal and unfair trade practices of Quantum,'' said Frank Russomanno, Imation vice president and general manager of data storage media and services. ``These monopolistic practices hurt the market with higher, fixed prices and limited supply.''

DLT is a tape format used mainly by businesses and organizations on networks for backup and archiving, said Imation spokesman Brad Allen. The storage capacity ranges from 40 gigabytes uncompressed to 80 gigabytes compressed. Quantum has said about 17 million DLT tape cartridges are sold annually, and about 1.6 million DLT drives have been sold, Allen said. Imation has met with and is willing to continue meeting with Quantum in an attempt to reach a negotiated settlement, Russomanno said.

Quantum said the lawsuit was ``completely without merit,'' calling it a transparent effort to distract customers from Imation's failure to qualify its tape media product for use with DLT tape drives. ``We have worked closely with Imation for more than two years, in good faith and at substantial expense, to assist it in qualifying to manufacture a DLT tape-based media product,'' said Michael Brown, Quantum chairman and chief executive. ``After signing a license agreement, gaining access to our intellectual property and failing to qualify, Imation has apparently abandoned its qualification efforts, has announced its intention to sell unqualified tape media and has filed suit against us,'' Brown said.

Imation announced Monday it is introducing an Imation manufactured and certified Digital Linear Tape compatible with DLT drives. According to the lawsuit, Quantum fixed prices on DLT-compatible tape, invited Imation to join an illegal tape cartel and inappropriately extended patents on licensed DLT tape drives to tape media as a way to enforce its monopoly hold on the tape market.

In addition, the lawsuit claims, Quantum has misrepresented DLT-compatible tape as an open standard with competitive pricing. Brown disagreed, saying there are more than 10 competing brands of DLT tape media, including Compaq, Hewlett-Packard, IBM, Sony and TDK, that are priced independently.


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