The running battle between Iomega and Nomai, which has staggered through numerous US and European courts, has come to a sudden halt with the storage giant buying the removeable drive specialist.
Iomega has bought a majority stake in the French company for $21 million and will pay an additional $3 million for Nomai's technology. The battle, which raged for more than a year, focused on an Iomega claim that Nomai's XHD 100Mb super floppy disk was not compatible with its zip drive. Iomega also claimed Nomai was guilty of unfair competition, infringing copyrights and patents and 'parasitism'. But many observers saw it as Iomega throwing a tantrum at the prospect of losing some of its valuable media market.
Nomai threatened to focus on the low-cost OEM market, an area Iomega had failed to address. Iomega has already embarked on a cost-cutting exercise due to a downturn in its fortunes. It has had to make 700 redundancies and will be hit by a charge of between $5 million and $10 million and is expecting Q2 losses of at least $25 million.
James Sierk, CEO of Iomega, said: 'As the settlement discussions progressed, we learned that Nomai had a strong R&D team and certain technology under development that could provide synergies to both companies.'
Bob Peyton, IDC European analyst director of storage research, said the move would allow Iomega to increase its media volume, as well as eliminate a competitor.
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