French digital storage provider Nomai announced that it will ship its Zip-compatible XHD 100MB Super Floppy diskette in France starting immediately, and in Germany within the next 30 days. American distribution is slated for fourth quarter this year or January of next year, according to the company.
But Iomega will press ahead with its legal challenge on both sides of the Atlantic.
"Iomega has an innovative technology that's incorporated in the drive and the disc and that's protected by patent, copyright, trade secrets--and we have strong rights in trademark," said Iomega general counsel Laurie Keating. "We have strongly protected our rights, and we will continue to do so. We have not authorized Nomai to use our technology."
Iomega's Zip storage cartridge holds up to 100MB. Nomai will be the first independent manufacturer to offer Zip-compatible cartridges. Zip cartridges, which are about the size of a floppy disc, offer a convenient way to back up data. The Zip drive, the device that reads the cartridges, plugs into a PC's parallel port connection.
Iomega brought two suits against Nomai this year, one in Paris and one in Hanover. In the Paris suit, Iomega claimed patent infringement, copyright infringement, and trademark infringement on the European version of the product. According to Nomai, Iomega lost on the first two counts and won on a "trade dress" trademark count that Nomai lawyer Jeff Kingston said Nomai had resolved by altering the shape of the cartridge. He also characterized the count as "very minor."
"Complete poppycock," said Keating in response to that characterization. "The French order prohibits Nomai from selling a product that duplicates the shape of the cartridge or the shape of the shutter." Keating, who said she had not seen Nomai's altered cartridge, noted that Nomai faced a potential fine of $100 per disc for any violation of the order, and that the order was still in place.
In the Hanover case, Iomega won an injunction against Nomai, but that injunction was lifted September 9. Iomega announced it is appealing the lifting of the injunction.
Keating downplayed the threat Nomai would pose to Iomega if the French company succeeded in bringing its product to market--at however low a price.
"I'm not sure if to save money people are going to go with an untested, unproven product. I think people put a lot of value on comfort level. If a disc caused damage with an unauthorized drive, our warranty wouldn't be honored," she said.
Officials at Nomai USA declined to say how much they would undercut Iomega's American price tag except to say that the Super Floppy would be "aggressively lower-priced."
Analysts agree that even a legally victorious Nomai wouldn't pose much of a threat to Iomega.
"It's a relatively small threat," said Jim Porter, president of DiskTrend. "It's a small company whose distribution is primarily in Europe...They're more concerned about the precedent. If Nomai can do this successfully, what's to stop others from seeing it as an interesting market opportunity?" he asked.
Porter predicted more legal battles to come. "Iomega's going to try to prevent any activity that would impinge on what they think their market is. They will continue to be aggressive about it," he said.
Keating confirmed Porter's prediction, and warned that Iomega would battle the smaller company at home and abroad. "We have four issued patents that protect this cartridge in the United States, and if we conclude that the cartridge infringes on our patent and our registered copyright in the U.S., we will take aggressive legal steps to protect them."
Nomai would not comment on reports that the company is also planning to release its own version of Iomega's Jaz cartridge, which has capacity of 1GB.