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Quantum and Imation settle DLT tape lawsuit

Back up solution provider Quantum has agreed to pay competitor Imation $5m (£3.4m) as part of a settlement that ends their legal battle over the production of Digital Linear Tape (DLT) products.

In a statement Imation said it has dismissed an antitrust lawsuit that it filed in October against Quantum, in California, in which it accused the company of fixing prices for DLT cartridges and conspiring to monopolise the cartridge market.

For its part, Quantum agreed to dismiss its trade secrets lawsuit against Imation, which it filed two days after being charged with the antitrust violations.

DLT tapes are used primarily for backup storage, archiving and disaster recovery, and are produced by a number of vendors. Quantum holds patents on the DLT tape standard.

Quantum said it has agreed to pay $5m to Imation over an 18-month period. In its original suit, Imation had sought damages from Quantum of $150m (£102m), which would have been tripled under antitrust law to a minimum of $450m (£307m).

The cost of the settlement will be factored into Quantum's results for the fiscal year, which ended 31 March. It will increase Quantum's net loss, based on generally accepted accounting practices, to $82m, or $0.53 per share, from $79m, or $0.51 per share, according to the statement.

As part of the deal, the companies also agreed that Imation, based in Oakdale, Minnesota, could become a qualified manufacturer of DLT tape media. They also entered into a multiyear business and supply agreement, according to the statement. Details of that agreement and other points of the settlement were not disclosed.

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