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.