STEC Rebuffs Seagate Patent Lawsuit

 
 
By Chris Preimesberger  |  Posted 2008-04-15
 
 
 

Solid-state drive maker STEC said April 15 it will vigorously fight a four-count patent-infringement lawsuit brought by Seagate Technology the previous day.

The SSD manufacturer, based in Santa Ana, Calif., also said it is in the process of preparing counterinfringement suits against Seagate, the world's largest hard drive maker.

Seagate's legal action contends that STEC has profited by infringing upon several of its key intellectual property patents.

Seagate CEO Bill Watkins, writing on his company's Web site, said Seagate has invested $7 billion over the last 10 years in R&D and has more than 3,900 U.S. patents in its portfolio, and that STEC is profiting from that research.

Watkins said Seagate, in Scotts Valley, Calif., welcomes competition because "it drives innovation, benefits customers and results in a host of other benefits to our increasingly digital world."

But Watkins also wrote that Seagate must defend itself against "others in our industry [who] have taken shortcuts in the race to innovate, and in the process ... are relying on intellectual property developed or acquired by Seagate."

An aggressive move
 
STEC, which claims to be one of the first companies to build SSDs, has designed, manufactured and shipped SSDs beginning as early as 1994, long before any of the four patents in question were issued to Seagate, said Manouch Moshayedi, chairman and CEO of STEC.

"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," Moshayedi said in a statement.

Click here to read about Seagate storage units that shipped carrying a virus. 

"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," Moshayedi said. "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."

Moshayedi said STEC will closely examine the patents asserted by Seagate because STEC believes it held such technology including prior patents, dating more than a decade prior to any of Seagate's patents.

Door open to major NAND providers

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

Avi Cohen, head of research at Avian Securities, said in a research note dated April 15 that he believes Seagate may have a hidden agenda here.

"Seagate's litigation is ... an attempt to position itself as an attractive partner with valuable IP," Cohen wrote. "We see STX's [Seagate's] choice to litigate against STEC as particularly telling. Seagate has previously indicated it believe[d] partnering with a NAND fab is necessary for long-term success in the SSD market. ... By suing STEC rather than one of the integrated flash suppliers, Seagate leaves the door open to a relationship with the major NAND providers, while at the same time demonstrating the value of its patent portfolio."

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