Seagate Technology has filed suit against the company that manufactures the solid-state disk drives that EMC Corp. uses in its Symmetrix storage systems. The lawsuit alleges that the solid-state disk drives (SSDs) of Stec Inc. infringe on Seagate's patents.
Seagate filed the lawsuit in the U.S. District Court for the Northern District of California, claiming Stec violated four patents Seagate registered between 2002 and 2006. Seagate is seeking an injunction and damages. Stec counters that Seagate is bringing this lawsuit because Stec is eating into its market share as SSDs grow more popular, a perspective bolstered by recent public comments from Seagate's CEO.
In January, EMC signed Stec to add SSDs to its high-end Symmetrix storage systems. Seagate is expected to have SSDs out this year, as well. There is no word of legal action against any company other than Stec.
However, in an interview that appeared in the March issue of Fortune magazine, Seagate CEO Bill Watkins said he was convinced that flash drive makers, such as Samsung and Intel, were violating Seagate intellectual property, raising the possibility of lawsuits if flash drives started becoming more affordable.
Flash memory prices dropped in the last quarter, so much so that in March Intel cut back its first-quarter gross margin forecast because of lower-than-expected prices for chips. Intel then declared it was entering the SSD market.
"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 said in a statement. "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."
In an open letter on Seagate's website, Watkins wrote, "This is not about stifling innovation or threats to our business from solid-state technology. It would be our preference to avoid costly and distracting lawsuits and to instead pursue constructive commercial partnerships and licensing agreements with others in our industry … however, until the underlying infringement is stopped, it is necessary for us to take all of the required steps, including legal action."
IDC analyst Dave Reinsel said that the lawsuit shows that SSDs are for real as an enterprise play. "I can't say who's wrong or who's right in this case," he said, but one thing that lawsuit does do is "validate that SSDs are no longer a niche, and their growth is not just hype," he said.
So why would Seagate go after Stec only? Reinsel theorized it's because, "Stec is the one supplying EMC for top-tier storage, and they're the first one to really have a viable, reliable solid-state solution adopted by a major storage OEM, which is Seagate's bread and butter." He said there could be other reasons, and added, "This lawsuit could also go away if there's an acquisition or a merger -- we can really only surmise what Seagate's motivation is."
Any acquisition talks after this point "would be awkward," according to Patrick Wilkison, Stec vice president of marketing and business development. However, he did say singling Stec out "might be a tactical move to force us into some type of collaboration venture, since they're having trouble bringing their own product to market."