SyQuest says Iomega lawsuit just a marketing ploy

Disk drive maker SyQuest has called rival Iomega's patent and trademark infringement lawsuit against it 'a reckless marketing ploy and without any basis in fact. Obviously, Iomega is feeling the heat,' SyQuest's president and CEO Ed Harper said, in a statement released a day after Iomega filed the suit. 'Perhaps Iomega is recognising it can't compete on product merits and is attempting to move the battle from marketplace into the courtroom.'

Disk drive maker SyQuest has called rival Iomega's patent and trademark infringement lawsuit against it "a reckless marketing ploy and without any basis in fact."

"Obviously, Iomega is feeling the heat," SyQuest's president and CEO Ed Harper said, in a statement released a day after Iomega filed the suit. "Perhaps Iomega is recognising it can't compete on product merits and is attempting to move the battle from marketplace into the courtroom."

Harper was not available for interviews.

The complaint, filed by Iomega Tuesday, alleges that SyQuest is infringing on two Iomega patents, one covering Iomega's Read/Write Protection Scheme used in both its Jaz and Zip products and the other covering the design of Iomega's Jaz cartridge.

"We have spent [US]$30 million for research and development in the first half of 1997," said Laurie Keating, senior vice president and general counsel at Iomega. "We are proud of our inventions that yielded a strong patent portfolio. We want to protect our intellectual property rights."

Iomega did not contact SyQuest before filling the lawsuit since it has no intention to license the patent to SyQuest in any case, Keating said, alleging that SyQuest is knowingly infringing on Iomega's patents.

The suit also seeks to prevent SyQuest from using the name "SyJet" in print advertisements, packaging and products, which Iomega claims infringes on its JET trademark.

SyQuest officials said Jet is a generic term and the company has a trademark on the term SyJet. Iomega, however, said Jet is very prevalent in its product packaging and SyQuest's use of the term Jet to describe its products confuses customers as to the products' source.

Iomega's Keating also said SyQuest adopted Iomega's patented dome-shaped cartridge design to confuse the market.

SyQuest's Harper retorted that Iomega wants to distract the market from its own troubles.

"Iomega knows we are about to launch an aggressive marketing and advertising campaign designed to help us retake the leadership position at the high end of the removable storage market," Harper said. "This suit is designed to distract us from our focus."

"Recently, Iomega has had to do a product recall, is facing a class action suit from its own customers over product warranties, and has seen several of the company's top executives leave to join SyQuest," he said. "We think Iomega has every reason to be concerned."

One analyst said the lawsuit in part indicates that the removable disk drive market is very marketing-driven.

"There is no evidence that Iomega lost market share in the last 12 months," said Crawford DelPrete, vice president of storage research at International Data Corp. in Framingham, Massachusetts. "The difference is that there are two sources for removable drives now."

Iomega, based in Roy, Utah, can be contacted aon the World Wide Web on http://www.iomega.com/.

SyQuest, in Fremont, California, can be reached on the Web at http://www.syquest.com/.

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