Rackable and Supermicro settle over server IP

Low-cost server makers Rackable Systems and Supermicro have settled a patent dispute over system designs.

The companies have reached a confidential agreement covering the two troublesome patents - Rackable's 6,496,366 and 6,850,408. These patents were tied to Rackable's back-to-back server configuration in a custom chassis and its front-mounted approach to I/O connectors.

Rackable filed its initial patent infringement lawsuit against Supermicro in Sept. 2005. In April of this year, a judge denied "Super Micro's motion for summary judgment on Rackable Systems' inducement of infringement and direct infringement claims," Rackable said. As a result, both companies dismissed their claims and counterclaims and went the confidential settlement route.

Rackable and Supermicro compete in similar spheres. Both companies sell compact systems that use server chips from Intel and AMD. Rackable, however, enjoys more direct sales to large customers such as Yahoo!, Microsoft and Amazon.com, while Supermicro often feeds it designs to OEMs.

Supermicro IPOed in March and revealed 2006 sales of $302.5m.

Rackable just suffered through a disastrous first fiscal quarter that cost CEO Tom Barton his job. Rackable's revenue during the period fell 15 per cent to $72m. ®