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Bane of Silicon Valley patents sets its sights on Rackspace and NetApp

Firms fighting off rocket docket suit as a matter of principle

Cloud host Rackspace and storage vendor NetApp are fighting a patent holder who's targeted some of tech's biggest names in the notorious Eastern District of Texas.

The duo are standing up to Realtime Data over the firm's claim they violated seven patents it owns, spanning compression and deduplication.

Realtime has filed six claims against NetApp or against NetApp and Rackspace jointly, plus a seventh claim solely asserted against Rackspace.

NetApp appears the primary target with Realtime citing claimed violations in NetApp's ONTAP, all the company's flash AFF-based series or products and its hybrid disk FAS systems, FlexPod, NetApp Private Storage (NPS) for Cloud, ONTAP Cloud and SolidFire, which NetApp bought in February 2016.

Rackspace has been ensnared too, it seems, because it uses NetApp's gear to float its OpenStack cloud.

Rackspace's marketing touts its OpenStack-based private cloud and cloud backup as being "powered by NetApp".

The Realtime suit filed in June – case number 6:16-cv-961 – seeks damages, costs and expenses before a jury.

The suit has been filed in the Eastern District of Texas, Tyler Division; Realtime Data lodged cases against 21 firms dating as far back 2008 in the region.

Eastern Texas has become a major destination for patent cases. The legislative branch hears more patent cases than any other court system in the US – around a quarter have been filed there in one year.

The district has attracted litigants because it's known as a "rocket docket" – a court that streamlines filings, cutting the size of documents lawyers can file and reins in their presentations to the court.

The majority of Realtime's cases in Eastern Texas, 16, have been filed in just the last two years – against Dell, Oracle, Hewlett-Packard Enterprise, Fujitsu, Apple BMC, Dropbox, SAP and Microsoft. Rackspace has dismissed Realtime Data as a patent troll. It says it's contesting the suite because it has learned from experience to fight claims as a matter of principle. East Texas requires all parties to go to trial, unless the judge grants motion for summary judgement, which can make a persuasive case for litigants to settle in order to stem potential losses and contain costs. In patent disputes, defendants typically choose to settle quickly and early to avoid the length and expense of a patent case. The American Intellectual Property Law Association in 2013 said the cost of a case where $1m-$25m is at risk was $4.4m.

Associate general counsel Van Lindberg told The Reg: "Since 2012 we have been committed to fighting patent trolls in the public space and court and elsewhere. And as soon as we stood up to these trolls, we started winning.

"What's really amazing is that a lot of the things they [Realtime Data] are alleging are mutually incompatible – they claim patent documents they interpret one way then if you believe them they have a second set of documents that don't work."

Lindberg was hired in 2013 by Rackspace to stem what he called a tide of patent suits.

The Register contacted attorneys for Realtime Data but did not receive a response at the time of writing.

NetApp general counsel Matt Fawcett, meanwhile, said in a written statement simply: "NetApp has a long history of vigorously defending ourselves against non-practicing entities, and view the general practice of patent suits like these as hostile to innovation."

Linux patent experts sought to assure OpenStackers that Realtime Data's claim does not represent a threat to their chosen cloud just because Rackspace is caught up and because their OpenStack-based cloud employs the context NetApp systems.

Keith Bergelt, chief executive of the Open Invention Network (OIN), told The Reg: "We do not view the patents as representing a threat to open source, the kernel or OIN's Linux System.

"Rather, these are a set of data compression-related patents that do not bear directly on open source and are not specific to any individual project's core technology. For this reason we do not anticipate that the litigation and/or licensing of such patents will negatively affect the growth of the OpenStack project."

OIN opens patents defensively so that individuals and organisations cannot asset claims against Linux or open source.

Members of OIN, founded in 2005 initially to shield Linux against claims by the litigious SCO, include Google, IBM, NEC, Red Hat, SUSE and Toyota.

Realtime Data owns a portfolio of 30 patents grouped into families that are close together in terms of what they claim to cover.

According to Rackspace's Lindberg, Realtime has spread its various assertions so different groups of patents are asserted against different defendants at different times, therefore making it difficult for those charged to co-ordinate a defence.

The patents in the Rackspace and NetApp case are: US patent No. 7,161,506 for systems and methods for data compression such as content dependent data compression and granted in January 2007; No. 9,054,728 for data compression systems and methods awarded June 2015; No. 7,358,867 for content independent data compression method and system awarded April 2008; No. 7,378,992 for content independent data compression method and system awarded May 2008; No. 7,415,530 for system and methods for accelerated data storage and retrieval awarded April 2008; No. 8,643,513 for data compression systems and methods granted February 2014; and No. 9,116,908 covering system and methods for accelerated data storage and retrieval from August 2015. ®

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