Seagate Sues Solid-State Storage Maker STEC For Patent Infringement

Seagate Technology, the world's largest maker of hard disk drives (HDDs), on Monday said it had filed a patent-infringement lawsuit against STEC, a maker of solid-state drives (SSDs) and computer memory products.

Seagate CEO Bill Watkins announced the lawsuit in a letter posted on the company's Web site.

In contrast to the $7 billion Seagate has spent on research and development over the past 10 years, work that has resulted in a portfolio of 3,900 patents, Watkins said that "others in our industry have taken shortcuts in the race to innovate, and in the process, we believe they are relying on intellectual property developed or acquired by Seagate to their own benefit."

Seagate, he said, has not been a particularly litigious company. Nonetheless, he said the company had an obligation to protect its shareholders. Since 1999, according to Justia.com, Seagate has been the plaintiff in two cases and the defendant in 17.

In an e-mailed statement, STEC characterized Seagate's action as anti-competitive. "STEC is one of the first companies to build SSDs, having designed, manufactured, and shipped SSDs as early as 1994, long before any of the suggested patents were issued to Seagate," the company said. "Given the effect SSDs are having on the HDD market, STEC believes that Seagate's lawsuit is completely without merit and primarily motivated by competitive concerns rather than a desire to protect its intellectual property. STEC believes that Seagate's action is a desperate move to disrupt how aggressively customers are embracing STEC's Zeus-IOPS technology and changing the balance of power in enterprise storage. Seagate is sending a clear signal that it recognizes STEC as the leader in the SSD business and is attempting to slow down part of the growth that STEC is gaining through its SSD offering, particularly in the enterprise segment. STEC will aggressively pursue its defense to this infringement action."

In the consumer world, SSDs have yet to hurt hard disk makers. USB Flash drives and the 64-GB solid-state drive available with Apple's MacBook Air remain significantly more expensive than hard disk storage, and the theoretical performance advantage is still largely unrealized. Over time, however, that is likely to change.

Responding to speculation about Seagate's motives for pursuing this case, Watkins stressed that this case is not an attempt to kill a competitive technology. "This is not about stifling innovation or threats to our business from solid-state technology," he said. "We welcome advances in this and other technologies, and in fact we continue to invest considerable R&D funds and now have teams of people focused on the development of Seagate solid-state and related technologies. What this lawsuit is about is preserving for our shareholders the value we have created by building an industry-leading patent portfolio."

Pat Wilkinson, VP of marketing and business development for STEC, said that the company's IP team believes that the patents cited in the lawsuit " U.S. Patent Nos. 6,404,647 (issued in 2002), 6,849,480 (issued in 2005), 6,336,174 (issued in 2002), and 7,042,664 (issued in 2006) -- were filed long after STEC was shipping products. He said he expected STEC's attorneys would be able to invalidate Seagate's patent claims based on prior art.

The lawsuit, said Wilkinson, took STEC by surprise. Usually, he said, companies discuss potential infringement with an eye toward a negotiated settlement before litigation proceeds. "It's very unorthodox that they would not have approached us first," he said.