Seagate swiftly sues STEC (and bad fix)

It's IT Blogwatch: in which Seagate protects its intellectual property portfolio against a flash drive maker. Not to mention how not to fix a leak of personal information...

Dan Nystedt reports:

Seagate Technology LLC filed a potentially far-reaching patent infringement lawsuit against STEC Inc. yesterday, over flash memory-based solid-state drives (SSDs). Seagate, one of the world's largest hard disk drive (HDD) makers, claims that several STEC products, including SSDs and some DRAM (dynamic RAM) devices, infringe as many as four of its patents ... Seagate and Western Digital Corp. partnered with SanDisk Corp. in the 1980s to establish the flash card market, gaining access to key flash SSD intellectual property, some of which is being used in the complaint ... Such cases rarely go to trial. The parties usually settle after squaring off over which one has more patents. The owner of the larger patent portfolio, Seagate in this case, normally ends up naming the settlement terms ... The STEC case will likely be a proving ground for Seagate's patents ... [and] could result in the company winning cross-licensing agreements and collecting royalties not only from STEC but also from other SSD makers such as Samsung Electronics and Intel Corp. more

Told you so, says Stewart Meagher:

[It's] a shot across the bow of anyone intending to manufacture Solid State Drives (SSD) ... Seagate contends that STEC's products violate four patents covering how SSD drives connect to computers. Patrick Wilkison from STEC said that Seagate was clearly feeling threatened by the growing demand for SSDs and that it was "defending its turf." He added that Seagate executives did not contact STEC about infringement before filing the complaint. Seagate is reported to have invested $7 billion in R&D related to SSD in the last year. As there is a lot of buzz about the emerging technology, but not whole hell of a lot of cash business, (and as much as we like to shout the corner of the little guy) we reckon Seagate probably has a point. more

Nilay Patel:

Seagate was talking a big game last month about how SSD makers like Samsung and Intel were infringing its patents, and the company wasn't joking around ... As you'd expect, STEC doesn't feel quite as casual about the situation, saying that it's been making SSDs since 1994, before any of Seagate's patents were filed, and that it's going to aggressively defend Seagate's "desperate" claims and seek to invalidate its patents. many of which it believes aren't even relevant to SSD technology. That sounds like a fight to us -- get ready for some nonstop paperwork legal thrills, people. more

Justin Mann recollects:

STEC (formerly Simple Tech) ... claims that Seagate is only taking action because they are beginning to target the enterprise level with their SSD products, a lucrative market that Seagate wants to protect. That fact alone has to be true, as Seagate's CEO said almost exactly as much in an interview last year. At the time, the Seagate CEO said that if other vendors began making headway into the market, they'd sue. Now that they have made good on their word, we'll see how well their patents will stand up. more

EMC's Mark Twomey watches too many movies and reads too many books, including Dune:

It's not a valid market until someone gets sued and it appears that the first target is the company with the viable enterprise technology. Commenting on legal matters is like taking polonium with your tea but I'd imagine that EMC would expect all it's suppliers to fulfil their contractual obligations regardless of any legal actions they're embroiled in. The FLASH must flow. more

Gregory Wong muses:

This is the first time a HDD manufacturer has sued a SSD maker. It’s hard to see the financial motivation behind such a move. STEC’s enterprise SSD revenues were only $11 million in 2007, although it could reach 4-10x more this year depending on the ramp of the ZeusIOPS and Mach8 MLC product lines. With a market share of over 50% in enterprise HDDs, Seagate clearly sees a longer-term threat ... [But] It’s no secret that Seagate has been courting NAND flash vendors to secure NAND flash for a SSD it’s planning for the end of the year. A rumored JV with Micron fell apart last year and it is apparently in discussions with two of the three largest vendors. One of the main stumbling blocks is what Seagate could bring to any cooperation as all NAND flash vendors have ambitions to develop and market SSDs. more

Humphrey Cheung:

It’s a classic case of David versus Goliath since Seagate has $12 billion in annual revenues while STEC made just $190 million last year. The lawsuit didn’t come as a big surprise ... But isn’t this a clear cut case of an established technology company trying to stifle an upstart flash drive industry into oblivion? According to [CEO Bill Watkins], Seagate actually supports flash technology and wants to see it flourish and said, “This is not about stifling innovation or threats to our business from solid state technology. 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.”. more

Michael Papet has déjà vu:

It's a shakedown. Seagate fears the market potential STEC has. The simplest path is to litigate STEC to death over patents or trademark. It's happened to every small company I've worked for. Most of them closed up shop because the big fish buried them in Trademark and Patent litigation over and over again. more

But stoev looks to the future:

There is nothing, nothing, nothing innovative in SSD. The innovation may exist in Flash memory manufacturers and even this is very much in doubt. The situation currently is that huge companies like Samsung, Intel, Toshiba,... make enormous investments for new flash factories. They will be the beneficiaries of SSD, not some small innovative company. Seagate may be a monster in HDD business, but it is nothing compared to Samsung in more general terms. So I wish Seagate good luck in defending their business. Because the next company they will have to target will be Samsung and this will not be a walk in the park. more

And finally...

• How not to fix a leak of personal information
  

Buffer overflow:

• Nate Anderson: Comcast to spearhead creation of P2P Bill of Rights
• Betsy Schiffman: 'Google Killer' Nabs $25M in Second Round of Funding
• Zack Urlocker: MySQL Conference kicks off
• Om Malik: New Toy Alert: ThinkPad X300
• Mitchell Ashley: Gartner Predicts Comet Strikes Microsoft in 2011
• Good Morning Silicon Valley: Get your Mac clone now and beat the big cease-and-desist rush
• Ryan Paul: Sun touts big plans for OpenSolaris as first release nears

Other Computerworld bloggers:

• Angela Gunn: If you care about intellectual property, find a TV tonight
• Preston Gralla: Vista: The kiss of death for Microsoft execs
• Don Tennant: Pro or parasite?
• Mark Hall: Virtual desktops on the prowl
• Mike Elgan: Where to find free Wi-Fi in Greece
• Douglas Schweitzer: Flea market, free market or black market?
• Shark Tank: That would explain it
• Shark Bait: Recent Experiences with Antique Equipment

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Richi Jennings is an independent analyst/adviser/consultant, specializing in blogging, email, and spam. A 20 year, cross-functional IT veteran, he is also an analyst at Ferris Research. You too can pretend to be Richi's friend on Facebook, or just use boring old email: blogwatch@richi.co.uk.

Previously in IT Blogwatch:

• Google App Engine's lock-in unlocked? (and burn rope)
• Send in the (OpenMac) clones (and DIYiMac)
• Gartner: Microsoft Windows, R.I.P. (and a Java house?)