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HP to pay EMC $325 million in patent settlement

Companies settle four-year patent dispute over storage technology with payment and five-year cross-licensing agreement.

Hewlett-Packard buried the hatchet on a long-standing patent dispute with EMC on Monday, agreeing to pay $325 million to settle the case.

Under the terms of the settlement, HP can satisfy the $325 million payment by purchasing an equivalent amount of EMC products, such as its VMware line of server software, within five years. The companies have also signed a five-year cross-licensing agreement and said they will look for new ways to collaborate.

HP and EMC initiated settlement talks in February, after a federal jury found that HP had infringed on patents protecting EMC's data storage technology. The companies had been litigating the matter since 2002, when HP filed a complaint against EMC. The storage specialist responded with a countersuit.

The disputed patents related specifically to technology for transferring data between different storage formats, moving data from one storage system to another, connecting servers to storage systems, data mirroring and mainframe data storage.

"HP is happy to conclude this matter in a way that recognizes the strength of both companies' intellectual-property portfolios and provides positive benefits to customers desiring interoperable multivendor solutions," Joe Beyers, HP vice president of intellectual-property licensing, said in a statement.

The bad blood between the two companies dates back to 1999, when HP swapped EMC for Hitachi as its partner of choice in the high-end storage market and proclaimed EMC's products old and proprietary.

But throughout their wrangling, HP has continued to help EMC sell VMware, a software product that EMC acquired last year that lets a single workstation run multiple operating systems.