Nomai SA of Avranches France is up to its old tricks again, copying disk formats that disk-drive innovator Iomega deems a breach of copyright and patents, in the hope of cashing in on the massive success of Iomega’s zip drive technology. Over the past two years Nomai has twice fallen foul of legal actions with Syquest over this very same issue, one current, where Nomai is accused of making compatible cartridges with the Syquest secrets embedded in them. Iomega first let the cat out of the bag in its 10k filings in March, which completely eluded the popular computer press, but Iomega has now followed up with a US court filing and has a stipulated order entered in a federal district court to stop deliveries from an unnamed US supplier of the equipment that Nomai needs to make zip compatible cartridges and drives. It has also filed a motion for a preliminary injunction against Nomai in the US to be heard in July. A spokesman said: This is a temporary restraining order until we can get this thing to court in July, and the company we suspect of supplying Nomai has agreed to comply with the order until that time. While this temporarily takes away the threat of the market being flooded with cheap zip drives the initial court action may well see the case decided in Europe. The company gained a preliminary injunction after hearing that Nomai had a compatible product launch penciled in for Cebit in Germany. An injunction was filed at the Landgericht Court in Hannover, Germany, on March 19, prohibiting Nomai from manufacturing or offering its planned product in Germany for an initial period of six months. Iomega has since filed a motion for relief against the defendant in the District Court in Paris, France, where the case is likely to be heard, possibly before the US case. A negative outcome of a case like this for Iomega would knock it off its top spot at the low end of the disk drive market and open the doors to copycat technology worldwide. Iomega warned in its 10k that an adverse outcome in these proceedings could have a material adverse effect on the company’s future sales and operating results. Iomega stated in the filing that it has not licensed the Nomai to manufacture or sell Zip products, and believes the planned product would constitute unfair competition, infringements copyrights, patents and breaches of other intellectual property rights. Nomai is not new to legal proceedings over copyright infringement and in February SyQuest Technology Inc went back to court against Nomai over charges of patent, copyright and trade mark infringement, breach of contract and unfair competition. Syquest thought it had found an answer to Nomai’s competition, unfair or otherwise, when it agreed to buy the company in the last half of 1996, but the deal fell through. Iomega Corp grew 271.8% last year, to over $1.2 billion in sales, with vastly improved profits based largely on the success of the zip.
