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Rackspace, Brocade take on 'patent trolls'

Rackspace said it "drove a stake into the ground" in its fight against patent trolls

By , IDG News Service
April 05, 2013 01:50 AM ET

IDG News Service - Cloud computing company Rackspace has sued two companies it describes as 'patent trolls' for breach of contract, and asked a federal court for a declaratory judgment that it did not infringe three patents owned by one of the companies, Parallel Iron.

[ALSO: Tech companies tell Congress to target patent trolls]

In a separate development also with implications for patent trolls, which are firms that mainly own or manage patents and use them to make money from licensing and litigation, Brocade Communications Systems said it defeated yet another patent troll after an appeal by Chrimar Systems was turned down Thursday by the U.S Court of Appeals for the Federal Circuit.

"Today we drove a stake into the ground in our dogged fight against patent trolls -- we sued one of the most notorious patent trolls in America," wrote Alan Schoenbaum, Rackspace's senior vice president, and general counsel in a blog post on Thursday.

In December 2010, IP Navigation Group (IPNav) accused Rackspace of patent infringement as agent for a secret patent owner, now known as Parallel Iron, according to court records. It alleged that its patents on storage-area-network (SAN) and network-attached-storage (NAS) equipment also covered the open-source Hadoop distributed-file system (HDFS) used by Rackspace.

But IPNav declined to disclose information on the patent claims, or even the patent numbers and the patent owner, unless Rackspace entered into a "forbearance agreement," which Schoenbaum describes as "basically, an agreement that we would not sue them."

"IP Nav was worried that as soon as we found out what their patents and claims actually were, Rackspace would sue to invalidate their patents or for a declaration that Rackspace does not infringe," Schoenbaum wrote.

Parallel Iron however sued Rackspace and 11 others in Delaware last month without providing any notice, breaking the agreement they insisted upon, according to Rackspace.

"We aren't going to take it," said Schoenbaum, which is the reason the company sued IPNav and Parallel Iron on Thursday in the U.S. District Court for the Western District of Texas, San Antonio division. Rackspace has asked the court to enter a judgment declaring that Rackspace does not infringe three related patents owned by Parallel Iron. These are U.S. Patent Nos. 7,197,662, 7,543,177 and 7,958,388.

Rackspace also alleged in the court that Parallel Iron and IPNav breached their agreement not to sue Rackspace for patent infringement without first providing a written notice that settlement discussions had ended.

The Delaware Action is only the latest in a series of 23 lawsuits Parallel Iron has filed in Delaware on the patents-in-suit since June of last year, after Parallel Iron was forced to dismiss an earlier set of lawsuits on another patent that it could not enforce, Rackspace said in its complaint.

In the win for Brocade, the U.S Court of Appeals for the Federal Circuit affirmed an order by a district court which ruled in favor of Foundry Networks, a company Brocade acquired in 2008.

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