Quantum, Imation settle DLT tape lawsuit

Quantum Corp. has agreed to pay competitor Imation Corp. US$5 million as part of a settlement that ends their legal battle over the production of Digital Linear Tape (DLT) products, the companies announced Wednesday.

In a statement, Imation said it has dismissed an antitrust lawsuit that it filed in October against Quantum, in Milpitas, California, in which it accused the company of fixing prices for DLT cartridges and conspiring to monopolize the cartridge market. [See, "Imation files DLT tape antitrust suit against Quantum," Dec. 1, 2001.]For its part, Quantum agreed to dismiss its trade secrets lawsuit against Imation, which it filed two days after being charged with the antitrust violations.

DLT tapes are used primarily for backup storage, archiving and disaster recovery, and are produced by a number of vendors. Quantum holds patents on the DLT tape standard.

Quantum said it agreed to pay $5 million to Imation over an 18-month period. In its original suit, Imation had sought damages from Quantum of $150 million, which would have been tripled under antitrust law to a minimum of $450 million.

The cost of the settlement will be factored into Quantum's results for the fiscal year, which closed March 31, the company said. It will increase Quantum's net loss, based on generally accepted accounting practices, to $82 million, or $0.53 per share, from $79 million, or $0.51 per share, according to the statement.

As part of the deal, the companies also agreed that Imation, based in Oakdale, Minnesota, could become a qualified manufacturer of DLT tape media. They also entered into a multiyear business and supply agreement, according to the statement. Details of that agreement and other points of the settlement were not disclosed.

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