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Iomega buys majority share in firm it sued

SHARE Iomega buys majority share in firm it sued

Iomega announced Monday it has purchased for $21 million a majority of stock in a French computer data storage company it repeatedly had sued for copyright infringements.

Iomega said its numerous lawsuits against Nomai, S.A., of Avranches, France, have been settled and that Nomai "agreed that Iomega patents, trademarks, copyrights and trade secrets are valid and enforceable and that it had reproduced certain Iomega protected software in reverse engineering work . . . without authorization from Iomega.""We have always firmly believed in the strength of our intellectual property," Iomega president and chief executive officer James E. Sierk said. "We are very pleased to settle this litigation."

The resolution of the Nomai lawsuit comes as Iomega struggles in the marketplace. The company, which makes the Zip and Jaz removable media data-storage drives, announced last week it anticipates a second-quarter loss of up to $35 million and that it plans to lay off as many as 700 workers, including 400 at its headquarters plant in Roy.

The company lost $18.6 million in the first quarter.

Sierk, in an interview Monday, said settlement of the Nomai lawsuit will help the company regain its footing.

"This has been a distraction," he said. "It was taking management time."

More important, however, the settlement "gives a strong message about the strength of our intellectual property," he said. "It proves we can protect our revenue stream."

Iomega sued Nomai in Paris last year in response to Nomai's claim that its XHD 100 megabyte Super Floppy diskette was compatible with Iomega's Zip drive.

It was during settlement negotiations with Nomai that Iomega determined the company had something to offer. Sierk said Nomai has a "pretty reasonable research and development team" that could benefit Iomega.

The result was that Iomega agreed to purchase 53 percent of Nomai's stock for $21 million. In keeping with French law, it will present the remaining stockholders a similar offer within a few weeks.

In addition, Iomega will purchase "certain technology" owned by Nomai for another $3 million.