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HEWLETT-PACKARD AND EMC SUE EACH OTHER

Hewlett-Packard Co and EMC Corp have launched dueling patent infringement suits on data storage technology, as the two biggest firms in that industry lock horns.

HP, which filed first, had been seen by analysts as trying to force EMC to the negotiating table over a variety of issues. But by the end of the day the two storage industry leaders were dismissing one another's legal moves on the patents, which each said covered important core technology.

HP shot to the top of the data storage world when it acquired Compaq Computer in May. One of its biggest competitors is EMC, the No. 1 vendor by revenue of storage networks -- data machines that are pooled to more effectively share information with traditional networks.

HP, based in Palo Alto, California, said it had asked the U.S. District Court for the Northern District of California for monetary damages and injunctive relief to stop EMC from using technology from seven HP patents in EMC's Symmetrix, Clariion and TimeFinder products.

The patents covered a wide range of intellectual property that appeared to go back many years, from transferring data between storage media to recovering from disk failures.

Hopkinton, Massachusetts-based EMC said in its own statement it had charged in the U.S. District Court in Worcester, Massachusetts that HP had infringed on six of its patents covering core technology on copying data to remote locations, in part.

"The suit smacks of desperation," EMC spokesman Mark Fredrickson said after HP's first salvo, which he said came without warning.

"EMC is stabbing in the dark," returned HP spokesman Mark Stouse, after EMC countersued. He said some of the issues HP was pursuing were a year or more old.

Shares of EMC fell 43 cents, or 8.6 percent, to $4.57 and HP dropped 36 cents, about 3 percent, to $11.67, on the New York Stock Exchange, while the American Stock Exchange Computer Hardware Index fell 1 percent.

Negotiating Tactic

Nancy Marrone, a senior analyst at Enterprise Storage Group and a former HP employee, said HP appeared to be using the suit as a tactic to take EMC, which has filed its own suits on different issues, to the negotiating table.

"If EMC is going to be aggressive with lawsuits, HP is going to play the game too, to bring them to the table," she said after speaking with HP.

HP's Stouse said the suit was not in response to EMC litigation but he said HP would prefer to compete in the marketplace, not the courtroom, and HP's statement clearly referred to EMC's suits.

"EMC... has opted to pursue a lawsuit against one of our technology providers, Hitachi, as well as against HP directly through ongoing litigation relative to StorageApps, which HP acquired last year," Bob Schultz, vice president of marketing, HP Network Storage Solutions, said in a statement.

EMC read a message into the suit. "It looks like a competitive marketing volley," said EMC's Fredrickson. "They appear to be citing a range of things that go across the map."

He said the suit also showed HP was struggling to capitalize on its new lead in the marketplace.

HP's market share declined in the second quarter compared with HP and Compaq's combined share a year earlier, although the merger created a powerhouse, researcher International Data Corp said.