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IBM Agrees To Pay Computer Disk Maker Undisclosed Amount Over Patent Dispute

November 1, 1990

NEW YORK (AP) _ IBM agreed to pay a Scottish manufacturer of computer memory devices an undisclosed amount to settle a patent infringement suit, the two companies said Thursday.

The settlement could result in other payments by computer makers to the company, Rodime PLC, since its patents cover the most widely used type of internal memory device for personal computers, the 3 1/2 -inch magnetic hard disc drive.

″In Rodime’s opinion, a large number of the 3 1/2 -inch disk drives being manufactured do infringe″ on the patents, said John Altmiller, an attorney with Kenyon & Kenyon in Washington, D.C., who represents Rodime.

Neither International Business Machines Corp. nor Rodime would disclose the size of the lump-sum payment IBM made. IBM spokesman Brian Doyle did say that it would have no effect on the company’s earnings.

As part of the settlement, IBM and Rodime also agreed to cross-license each other’s patents covering the disk drives, the companies said.

″Is this a win for Rodime and a loss for IBM? No, we don’t think so,″ Doyle said. ″We felt both parties would be getting something out of it. It was a negotiated settlement. Each party believed that the other was using its patents.″

James Swent, Rodime’s chief financial officer, said Rodime’s primary aim was to gain acknowledgment from the world’s largest computer company that Rodime’s patents were valid.

Rodime, based in Glenrothes, Scotland, also has a lawsuit pending against Conner Peripherals Inc. of San Jose, Calif., a major disk drive maker. That suit was stayed pending the outcome of the IBM suit, Swent said.

″Obviously the two companies will be in discussions and we will have to decide whether we continue the stay,″ he said by telephone from Rodime’s U.S. headquarters in Boca Raton, Fla.

He added that he expected similar discussions would take place with other makers of 3 1/2 -inch disk drives.

″We expect to enforce our patents. We would hope that it would not involve litigation,″ he said.

Rodime, which makes its disks in Singapore and Scotland, reported a loss of $41.5 million, including a restructuring charge of $12 million, for the fiscal year ended Sept. 30, 1989, Swent said. Revenue totaled $96 million.

The 10-year-old company, whose shares are traded as American depositary receipts on the national over-the-counter market, has reported losses the past three years. Fiscal 1990 earnings have not yet been reported.

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