Features - Financial Plays Of The Week:

EMC, HITACHI SETTLE PATENT SPAT

Data storage systems provider EMC Corp and Japanese computer and electronics giant Hitachi Ltd said recently that they have settled a year-old patent dispute in the once fast-growing data storage business.

The one-time bitter rivals also reached a five-year agreement that includes cross-licensing of patents that had been under litigation, as well as the payment of an undisclosed sum by Hitachi to EMC, the companies said in a statement.

The possibility of a patent-related payout had already been factored into Hitachi's earnings targets for the business year to March 31, Hitachi spokesman Hirotaka Ono said.

The legal dispute broke out after Hitachi made a sudden splash two years ago in the market for data storage systems for big corporations, one of the hottest areas of the 1990s info-tech boom and a business that EMC dominated.

Hitachi racked up rapid sales growth of storage systems and appeared to be threatening EMC's dominant position when the U.S. company filed patent infringement suits against it in April 2002. Hitachi responded with its own suits.

EMC also took its case to the U.S. International Trade Commission, which was set to begin hearing evidence next week.

Hitachi's Ono said the settlement was part of a growing movement toward open systems in data storage, with customers increasingly demanding that systems from different suppliers be able to work together.

The data storage market has also gone cold as the info-tech boom turned to bust over the past two years.

EMC has cut 28 percent of its payroll from peak levels and its share price is less than one-tenth of its high during the IT bubble.

In the latest quarter, EMC's revenues edged down to $1.49 billion from $1.51 billion a year earlier.

Hitachi expects data storage revenues of 260 billion yen ($2.21 billion) in the current business year to March, up a marginal 10 billion yen from last year.

The companies also said they would exchange interface technology to make their storage systems work together more smoothly.