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Head of Emulex Labels Digital Lawsuit a Ploy

July 12, 1985|HEIDI EVANS | Times Staff Writer

The chairman of Costa Mesa-based Emulex Corp. charged Thursday that a patent infringement lawsuit filed against his company last week by Digital Equipment Corp. is simply a business ploy dreamed up by Digital to nose out its competitors in the computer peripheral market.

Digital, of Maynard, Mass., is seeking a court order prohibiting Emulex from marketing and selling disk controllers that are compatible with certain Digital computer systems. A disk controller allows computers to "talk" to one another. Digital claims Emulex infringed on seven of its patents.

"Based on our previous analysis, we do not believe these patents to be enforceable, nor do we believe that we are infringing on them," said Fred B. Cox, Emulex chairman. "We plan to conduct a vigorous legal defense."

Cox expressed surprise at Digital's lawsuit and said he views the move as an attempt by Digital "to establish itself as a sole source supplier . . . and definitely not in the best interest of its customers or our industry."

A spokesman for Digital declined to comment on Cox's statement.

Digital is ranked second to IBM in worldwide manufacturing of computer systems. It posted net income of $328 million in fiscal 1984 on operating revenues of $5.6 billion. Emulex has recently reported declining profits, including a 48% drop in net income to $1.7 million for the third quarter of its fiscal 1985.

Mike Lewis, Emulex's chief financial officer, said that while about 75% of his company's customers are Digital customers as well, the lawsuit should not damage those critical business links.

"I suspect that the lawsuit will take three to five years before it comes to trial and when it does, we believe Digital's patents will be found unenforceable," Lewis said.

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