A California Superior Court ruled October 30, 2001, that it will grant a preliminary injunction requiring Imation Corporation to pay Quantum Corporation royalties for the use of Quantums trade secrets while Imation continues with its federal antitrust claim against Quantum.
Quantum contends that Imation did not have the ability to manufacture quality DLT tapes when they began the licensing process three years ago. In making his ruling, Honorable William J. Elfving found, "A preponderance of the evidence established that Imation is using Quantums valuable trade secrets without authorization. When Imation first came to Quantum in late 1998, it was incapable of making high quality, highly reliable tape cartridges for use in Quantum DLT tape drives. Over the last two years, Quantum has provided Imation with trade secrets, tools and resources necessary to become a qualified manufacturer of DLT tape cartridges. As a result, Imations tape has improved dramatically. After two years of collecting Quantums trade secrets and benefitting from their use, Imation has repudiated the License Agreement and is using Quantums trade secrets without authorization."
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