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Wednesday, October 29, 1997 Tuesday, Iomega closed at 25 1/2, up $7/8 (+3.55%). TODAY'S RECAP: For the most part, Iomega message board posters shunned the mundane news of the NYSE trading a record volume of shares and posting a record point gain. Instead, patent news and issues (specifically related to Nomai's Zip-compatible disks) took center stage as did a brief debate over the merits and demerits of the forthcoming DVD-Ram drives. Enjoy! INDEX: Use the Search or Find feature of your word processor to locate the article number (Find: 1++, 3++, etc.) - or use AOL's Edit>>Find in Top Window Feature. If Find in Top Window is dimmed, just click on some text, anything, in the IOM Today window and try again.
1++ NovW reposts some earlier thoughts about Zip disk patents.
Recap written by TMF Weekly; posts
compiled by TMF Weekly. As always, the following posts represent the thoughts of our contributors, not those of The Motley Fool.
And now, the Best of the Board...Started 9:01pm ET 10/27/97. 1+++++++++++++++++++++++++++
Subject: Re: Zip Disk Labels JBK13 posted and noted: << I apologize if this was noted before, but I recently bought new zip disks and noticed that the labels aare different than the disks I bought earlier this year. Among the changes is this added notice: "Protected by US Patents Des. 370,009; 4,415,939; and applications pending in the US and other countries." >> I have posted the following message earlier concerning these patents:
Subject: Servo Pat. 4,415,939 Thanks to BernieFM for posting: << The front of my new Gig-O-Color disks also show on the front of the label. Protected by U.S. Patents Des.370,009; 4,415,939; and applications pending in the U. S. and other countries. >> That would confirms that the Disk Design Patent No. 370,009 indeed applies to Zip disks. Utility Patent No. 4,415,939 is an old patent filed and issued in the early '80. By the way, because of NAFTA, Utility patents may now remain effective for 20 years. But I am not sure. Again, I am not a lawyer, so what do I know? Probably nothing (according to lawyers). If Utility Patent No. 4,415,939 is noted on Zip disks, it would also confirm my earlier suspicion that older patents may apply to later and newer products. I just didn't know how far back to go look and didn't know which ones or how many of them would apply to Zip disks. Utility Patent No. 4,415,939 is about "Head positioning servo for disk drive". At first glance, it didn't seem to apply to disks. But if you read the following carefully, it seems that this patent could include claim(s) with respect to Zip disks: It seems to me that the apparatus and a special disk work together as a pair. The disk has positioning signals permanently recorded on it for guiding the read/write head(s). The specifically recorded signals on the disk may be the key part of the method to control the read/write head(s). Please correct me if I am wrong. Or please check that with a lawyer or a Patent lawyer. 2+++++++++++++++++++++++++++
Subject: Re: Zip Disk Labels Thanks NovW for reposting your message re: Zip disk patents, I had forgotten it. In that message you comment about the longer patent life under NAFTA. I don't believe, but as I am not a lawyer either I may be wrong, that the change in patent life time is retroactive. In any event, the difference is essentially immaterial for this patent. As I recall, under the old US Patent law, patents lasted for 17 years from date of issue. Under the new laws, they last 20 years from date of application. Patent 4,415,939 was applied for on 4/27/81 and issued on 11/15/83. Thus expiration would be 4/27/01 (under new law) or 11/15/00 (under old law) a difference of five months. Pure speculation follows.... This patent appears to have been important in the development of Bernoulli disks. Since Bernoulli disks have been produced by other manufacturers over the years, Iomega must have granted licenses for its use. In the absence of other patents actually being used for Zip disks (other than the design patent 370,009) it would not be difficult for someone to make a Zip compatible disk. All they would need is a license for the servo patent. I would have expected Iomega to "announce" via labeling that other issued patents are being used in Zip disks. Since the cost of modifying the mold for the disk shells is more expensive than the cost of modifying the print copy on the packaging, it should appear first on the packaging. Ira Smilovitz 3+++++++++++++++++++++++++++
Subject: Patents and Paradoxes OK, for those interested in learning more about the law of patents, this is a leading case by The Supremes that came down in March of this year - WARNER JENKINSON CO., INC. v. HILTON DAVIS.
http://caselaw.findlaw.com/cgi-bin/getcase.pl?court= The subject that the Court deals with is the "doctrine of equivalents". The Paradoxes: For Noami to win in a court of law, they must show that their product is not equivalent to Iomega's . . . but. . . . to win in the court of public opinion and sell their disks, they must show that it is. For Iomega to win in a court of law, they must show that the Nomai disk is equivalent. . . . but. . . . to win in the court of public opinion, they must show it's different. Who says law isn't any fun? Eric Turkewitz 4+++++++++++++++++++++++++++
Subject: DVD-RAM news and its meaning.... http://www.news.com/News/Item/0,4,15756,00.html?latest is the URL on CNet... Drives and discs based on the beleaguered DVD-RAM standard will come to market in January 1998, the first in a series of product releases in the high-density storage arena for the year. Matsushita Electric will commercially release DVD-RAM computer drives and discs into the U.S. and Japanese markets in January under its Panasonic brand name, The Panasonic LF-D101 internal drive will be able to read and record on discs with an overall capacity of 5.2GB. Initially, the drive will carry a suggested price of $799. Double-sided discs having a total capacity of 5.2GB will be available at the same time for $39.95. Single-sided discs with half the capacity will sell for $24.95. >> At last, the vaunted holy grail of storage will hit the market. Initially, its effect on Iomega will be nil. At $799, this doesn't even compete with Jaz. The remarkably lost cost of <1 cent/MB is pretty special for certain high volume applications. The initial drive cost will overshadow this for most. Perhaps more significantly, it seems highly unlikely this drive will be a standard feature of many PCs anytime in the next five years. The current OEM CD-ROM drive is probably a sub-$100 purchase for PC makers. The DVD-ROM drive is probably around $200-300 right now (i.e. I have no idea, but it's much more). Sometime in 1998, the DVD-ROM will begin to become more common. Dataquest, quoted in the article, believes that 10 million will be sold in 1999 -- less than 1 for every 10 PCs sold that year. And, again, that's DVD-ROM. DVD-RAM drives seem likely to cost somewhere around $250 by the year 2000, perhaps more, almost certainly not any less. Look at CD-RW today, which is still $400-700 for consumers. Those drives are less complex to build than DVD-RAM. Even if DVD-RAM reaches this price, its effect on the then-$49 Zip drive (internal price, externals will be perhaps $69-79) seems fairly minimal. Assuming Iomega and licensees sell 12 million Zip drives next year and 16 million the year after and 20 million the year after (which I think are perhaps conservative number), the Zip installed base will be close to 60 million by the end of the year 2000. At that point, DVD-RAM will perhaps have reached 5 million, although that seems extraordinarily unlikely. I would doubt that any removable, rewriteable storage device with a price over $500 has ever sold 1 million units -- ever. All told, it is hard to imagine much effect on the Zip, especially if you read deeper into the article. It tells of the possibility of having: * a Matsushita "standard" at 2.6GB per side * a Sony/HP "standard" at 3.0GB per side * a Hitachi "standard" at 4.7GB per side * a NEC "standard" at 5.2GB per side and, of course, the possibility that this whole Divx thing will screw up the entire DVD market. Even if standards get sorted out, it is safe to conclude that the Zip installed base will be 10x that of DVD-RAM if not 100x, at the end of the year 2000 -- all assuming that nothing else breaks Zip's momentum between now and then. Of course, nothing like lower prices will help continue building that momentum going forward. I believe that OEMs will pay <$40 per drive by then and that consumers will be able to buy disks at about $5 per disk, making Zip media a 5 cents/MB thing by then -- somewhat more competitive with DVD-RAM's <1 cent/MB price. _______________________________ End Report. Posts covered through 9:00pm ET 10/28/97. _______________________________
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