Struggling Imation Now Faces Sony Lawsuit

Struggling Imation Now Faces Sony Lawsuit

After missing financial expectations in its most recent quarter, Imation is now being sued for allegedly selling blank Blu-Ray discs.

Sony and three other companies have reportedly sued Oakdale-based data storage and security company Imation Corporation for a patent violation involving Blu-Ray technology.
 
The lawsuit, filed in U.S. District Court in Wilmington, Delaware, said that Imation sold blank, recordable versions of Blu-Ray discs, which Sony and the three other companies helped invent in 2009, according to Bloomberg.
 
The Blu-Ray technology provides a much sharper image than the average DVD movie disc. According to Bloomberg, the technology was spawned after Sony, Panasonic Corporation, Pioneer Corporation, and Koninklijke Phillips NV pooled their patents in a holding company called One-Blue.
 
The suit claims that selling packages of blank Blu-Ray discs with the official Blu-Ray logo violates the patents and encourages buyers to break the law whenever they record something, according to Bloomberg.
 
According to the complaint, Imation was aware that “its Blu-Ray products, including Blu-Ray discs, are especially made for use in an infringement of the patents.”
 
This is not the first stroke of bad luck for Imation, a company that has been struggling to turn a profit in recent years. Spun off from 3M in 1996, Imation shed most of its original businesses, reduced its 10,700-employee work force by 90 percent, and rolled out various corporate strategies, including a brief stint at trying to become a brand and product management company—before reverting back to strictly data storage, protection, and connectivity in January 2011.
 
Acquisitions that Imation has made in the last five years to help increase revenues and profitability haven’t driven the results its been seeking and the company’s most recent financial results have been on the decline.
 
In the most recent quarter, which ended March 31, Imation reported a net loss of $21.1 million, or $0.52 per share, compared to a net loss of $12.2 million, or $0.33 per share, during the same period in 2012.
 
Revenue, meanwhile, totaled $224.4 million, down 14.8 percent from $263.3 million in the first quarter of 2012. First-quarter revenue fell short of analysts’ projections of $264 million.
 
The lawsuit case name is One-Blue, LLC v. Imation Corp, U.S. District court, District of Delaware.

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