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  (Source: STEC)

Seagate CEO William D. Watkins  (Source: Seagate)
Seagate prepares for a fight with SSD manufacturers

Seagate CEO Bill Watkins caused a bit of a commotion last month when he stated that he was unimpressed with solid-state drives (SSDs) for notebook computers and that his company would look towards lawsuits if sales of the HDD competitors began to grow. It looks as though Seagate is now going through with its promise to bring forth the lawsuits.

Seagate fired off the first shots on Monday by filing a lawsuit against STEC's SSD products. Seagate, a company deeply entrenched in traditional HDD technology, said that STEC violated four of its patents relating to error correction, memory-backup systems, and storage interfaces with computers.

"Unfortunately, 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," remarked Watkins. "Seagate has not been a particularly litigious company, but we have an obligation to our company and our shareholders to protect what belongs to them."

According to Seagate, it talked to rival SSD manufacturers in an effort to make them license its patents. "They have blatantly decided they don't have to," said Watkins to the Wall Street Journal. "Now is the time to start enforcing our patents."

However, STEC said that no such talks took place and it didn't hear about the patent infringement until the lawsuit was brought forth. STEC VP of marketing and business development Patrick Wilkison stated that Seagate simply feels threatened by the steady progress being made by SSD manufacturers.

"It’s not a big financial issue yet because the market is just taking off," Watkins told the New York Times. "But that’s why we want to set things straight now."

"This is not about stifling innovation or threats to our business," Watkins continued in an open letter. "We have an obligation to our company and our shareholders to protect what belongs to them."

STEC is the first manufacturer of SSDs to be targeted by Seagate, but it appears that it won't be the last. According to iSuppli, the SSD market total just $19M during all of 2007. However, the speedy, shockproof drives are estimated to generate $330M in sales this year and grow to $8.7B by 2012.

Updated 4/15/2008:
STEC released a statement regarding the Seagate lawsuit. Here's a portion from that statement:

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. 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 addition, STEC will also closely examine the patents asserted by Seagate as STEC believes it held such technology including prior patents, dating more than a decade prior to any of Seagate's patents. Although STEC is in the process of analyzing the claims in this lawsuit, STEC believes that Seagate's asserted patents pertain to technologies where STEC has years of prior experience and/or patents. STEC has significant patents related to SSD which have been developed through the decades of experience STEC has with developing, manufacturing and shipping SSDs. Beyond that long history, STEC also believes that many of Seagate's claims are not relevant to SSD. For example, STEC was one of the originators of stacking technology with patents dating back to the mid-1990s, while Seagate's patent on this matter was issued in 2005.

Through this process, STEC will determine if Seagate is misappropriating any of STEC's core technologies; STEC will take appropriate action to protect its interests, including seeking the invalidation of Seagate's patents.





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