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Thursday, September 11, 1997 Wednesday, Iomega closed at $26 1/8, down $15/16 (-3.46%). TODAY'S RECAP: Without a doubt, the news item which took the message board by storm was information that an injunction against Nomai in Germany had been lifted. Posters went back and forth about the potential impact of such a ruling, the future potential of Nomai disks (if any) and Iomega's market share in general. A few posters discussed other topics as well, such as the Gig-o-Color and Zip II "product." 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++ EBJKY offers some suggestions for Iomega's new Gig-o-Color product.
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 10:01pm ET 9/9/97. 1+++++++++++++++++++++++++++
Subject: Re: Gig-O-Color spotted I haven't seen 'em yet....but, I'm not really impressed with this Gig-O-Color scheme....maybe it will be a good seller...time will tell....what I was hoping for before this product was announced was something really cool like art similar to what we see on C-Ds....I know that the mediums are different....but, how tough could it be....think about it....interesting art on the Zip disks to represent the different functions.....taxes....kid stuff....etc....special occasions...birthdays.....themes for Xmas....etc...it could be done...something more attractive...if they can do it on CDs so cheaply....should be able to do it on Zip disks....After that, I would like to see special promotions....kinda like beverage makers do with pop tops....Buy a 10 pack of disks....maybe somewhere in that stack is a disk stamped with a winning #.....wins a 3-pack of disks or a T-shirt or something.... OK...was this a stupid post, or what?.....have fun..... <<I also think you understimate the impact of this SKU. People will actually buy the Gig-O-Color instead of the 6 pack because of the colors... and I'll bet they'll pay more than for the regular Gig-A-Pack that sits right next to it>> 2+++++++++++++++++++++++++++
Subject: WE MAY HAVE BIG TROUBLE!! Preliminary injuction against Nomai selling disk that work with Zip drive have been lifted in Germany. Nomai claims they have altered that design. Iomega has the right to seek reinstatement and most likely will after reviewing the written court deciscion. Applies only in Germany. More to follow !! 3+++++++++++++++++++++++++++
Subject: Text of Iomega Press Release on Nomai Text of News release faxed from Iomega: I typed from fax errors are mine) IOMEGA HAS RIGHT TO APPEAL TO SEEK REINSTATEMENT OF PRELIMINARY INJUNCTION AGAINST NOMAI IN GERMANY Roy, Utah, September 10, 1997 Iomega corporation was informed late yesterday that the preliminary 9injunction it had been awarded in Ma4rch 1997 prohibiting Nomai SA, a French competitor, from manufacturing or selling in Germany Nomai's planned "XHD" cartridge intended for use with Iomega ZIp drives, wa lifted by the Landgericht court in Hanover, Gewrmanyy. The Company has the right to appeal the decision and intentds to do so following a review of the Court's writeen decision. In the meantime, Nomai claims to have altered the desgin of its cartridges and Iomega has initiated legal proceedsings against Nomai in the Regional Court of Hanover, Gemany. "We plan to continue to vigorously protect adn enforce out intellectural property rights," said Kim B. Edwards, Iomega president and cheif executive officer. "When we learned in March of Nomai's planned introduction of their supposedly ZIp=-compatible disks, and obatined sample parts of the Nomai cartridge, we took immediate steps to protect our intellectual property rights and we will continue defending those rights." Still in force are preliminary injunctions against Nomai, issued in Paris, France on June 20, 1997 following a hearing and breifing by the parties and against Emtec Magnetics GmbH a proposed reseller of Nomai's planned cartridge, issued ex parte in Germany in August 1997, both of which have been appealed. 4+++++++++++++++++++++++++++
Subject: Re: Knock-off Disks Hi Sports Fans, (Steelers, Rams, Bills, Fins,whoever) Some additional thoughts on the Naomi/Iomega injunction: It's not clear which intelectual property protection (IPP) rights of Iomega the initial injunction was granted on. Even if in the eyes of the court Naomi successfuly circumvented the original objections, they could still could stumble big on the next hurdle(s). In particular, didn't Iomega recently receive several disk patent rights that were not in place at the time the initial injunction was granted?? This could be key here. My money is on Iomega prevailing. Rememer my longstanding assertion: "The Japanese really-big boys would have never signed on so early and deep with a (then) chicken-sh*t little company from Roy Utah, unless they were totally/absolutely convinced that IO had virtually ironcald IPP. They would have reverse-engineered the Zip concept, and marketed it themselves" Believe me, those guys have just a little more going for them than Naomi does. My belief is that Naomi is basically a pirate, pure and simple. Just my opinion. 5+++++++++++++++++++++++++++
Subject: Re: IMPLICATIONS OF INJUCTION << "(like nobody can sell Zip disks without Iomega's approval, which the doesn't seem accurate today) Iomega said it still has other injunctions in effect against Nomai in Paris" ..Ben, do these injunctions that remain have any effect on Nomai's ability to sell discs tomorrow??.. >> huibs, The lifting of the injunction, as I understand it, means Nomai may only sell in Germany. I don't expect Nomai to sell disks here, for example. That's how a lawyer explained it to me. Without the injunction in an area, however, there doesn't seem to be any legal restraint, does there? I mean, Nomai can now legally sell in the disks in Germany because the legal restraint that prior to this ruling that kept them from selling disks has been lifted. It also seems that technically, they are able to make the disks. Therefore, what is stopping them from selling them? Nothing legal or technical. It seems that the statement that nobody can sell disks without Iomega's prior approval is not factual, today. Perhaps next week Iomega gets the restraint re-instated. I'm not their lawyer. This also isn't to say Nomai can sell the disks in Germany tomorrow and get away scot free. If Iomega does manage, as I expect (but not 100% certain), to win the case in the end, there could be damages for any revenue Nomai recieved in the interim. As I said, I think the key is operations and I let the lawyers sift through all this. But also as I said, it is worthy of discussion as it is a REAL (i.e. more than 0%) risk to Iomega's intellectual property. How much of a risk (i.e., 1%? 10%?) I don't know but the risk is REAL as PROVEN by today's ruling. I'm not dismissing the importance of what happened or the importance of IP. I just believe the key going forward is operations and all the intellectual property protection in the world still can't manufacture a single disk. I'm hopeful, and somewhat confident (though the risk IS a concern), that this will be worked out to Iomega's favor. I'll keep my eye on it, especially for any German Zip disks labeled "Nomai." <G> 6+++++++++++++++++++++++++++
Subject: Legal Stuff Unless there is an injunction in place, anyone can sell disks anywhere. As far as I know, there is an injunction in France only at the moment. This does not mean, however, that Nomai can operate without risk. Ultimately, if they sell a disk in a country that is in violation of patents, iomega will sue them. It will then be up to the legal system of that country to determine if there was a patent violation and damages to be paid. I'll take a guess here and say that the German judge did not think this was a clear-cut violation of the patents, and will therefore let Nomai go forward for the moment. I would fully expect iomega to then bring suit for patent infringement and damages. Whether they win or lose at some future date, maybe years from now, nobody knows. Another risk, as Nomai may have engineered around the patents, is that they sell their own intellectual property (the Zip-killer disk) to a company that can produce in volume. Maybe they take back a buck-a-disk royalty, the company makes them for 2 bucks, and the things market for $5-6 hurting margins. Maybe. What can iomega do aside from bringing suits and getting injunctions? Well, the Zip is still a work in progress as it gets engineered smaller and cheaper. I would assume that a full-scale effort is going forward to have future drives recognize the knock-off disks and prevent them from being used in future Zips. Even if they can't do it successfully, the mere threat of doing it may be enough to stave off many a company from taking the risk for a substantial ramp-up to real volume. What good would the Zip-killer disks be if they weren't compatible with future drives? Just my two ruppees. Eric Turkewitz 7+++++++++++++++++++++++++++
Subject: Re: Knock-off Disks Benjamin70 wrote: << Patrick, without a legal restraint, what keeps Nomai from selling the disks legally in Germany? Ask yourself that question. Ask a lawyer that question. >> What keeps Sony from selling pirated Zip disks in Germany or anywhere? What keeps Imation from selling pirated Zip disks in Ecuador? Iomega has patents on the disks. That is what keeps Nomai from selling pirated Zip disks in Germany. Did yesterday's ruling say that Nomai did not violate any of Iomega's patents? From what I understand, the ruling was simply that the first injunction did not apply to the new pirated disk. If Iomega I.R. told someone on the phone different then let someone quote Ms. Stillings here. But, going on the press release, I concluded that no judgement was made on whether Nomai's disk violates Iomega's patents. If Stillings is giving different information then maybe she should have written a better press release. Iomega has patents that Nomai can not violate legally. Can they make this disk and suffer the consequences later? Sure. But that is a completely different situation than the one implied in your posts. Nothing is ever in place to stop illegal activity. That is the definition of illegal after all. Nomai could have disregarded the injunction also. Again, no Judge has said that Nomai's disk can be made legally. It seems to me that Nomai still hasn't even cleared the first hurdle. If they do engineer a disk that is not in violation of any Iomega patent then there are other hurdles. There are injunctions against necessary suppliers and probably other suppliers that are unwilling to burn bridges with Iomega. Thirdly, there is probably other technical issues not discovered by Nomai. After that there are always fair trade laws and technological improvements. Here is another question: Since Nomai is a French company; can they operate outside of France in a manner that is illegal in France? I think it is illegal for a U.S. company to do so for instance. As to the risk, IMO there is no more risk of cloned Zip disks now than before. I would still maintain that risk is next to nothing. But at least we are talking about something other than TA ;-) In fact, I would say the risk is considerably less than in September 1995. I doubt illegal disks would garner any significant market share and would be simply an annoyance to Iomega. Patrick Keeler 8+++++++++++++++++++++++++++
Subject: Am I looking at Zip II right now?? Hey, Sports Fans, Forget about injunctions and lawyers for just a minute, and help me check something out. Go back briefly to what has made Iomega's excellent marketing effort all possible--great engineering (Yes, I'm an engineer, can you tell?). The September' 97 issue of Computer Graphics World(www.cgw.com) is dedicated to rapid prototyping of new designs using computer models. On page 62 of the hard copy issue, they show : "A digital prototype of the Iomega Zip drive using SDRC IDEAS multiple viewports to show heat transfer and flow analysis, Bill of Materials information, and subassembly packaging instructions"" The drive shown is much sleeker in external design than our familiar/beloved Zip, and it has a small fan on the back end!! The internal layout of components seems much different than what we have seen to date. If you will remember long ago SDRC made a pitch about the original Zip being designed in record time using SDRC IDEAS software as a tool---the drawings shown at that time resembled the original Zip. These do not!!! Is this an obsolete design that Iomega didn't use???, some engineers daydream? , or am I staring/squinting at the future Zip II right now????? What is going on here, if anything?? Help me check this out, Sports Fans. Serious comments/criticisms are welcomed and encouraged---any IDEAs users out there??--I'm stuck with ACAD R13. Note/possible hint: The windowing program on the computer screen showing the Zip prototype is labeled: "IDEA's Master Series 5". This would have to be a *very* recent version of IDEAS, I suspect. :) _______________________________ End Report. Posts covered through 9:00pm ET 9/10/97. _______________________________
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