Seagate Decides It Can't Compete With Solid State; Sues Over Patents

from the shows-how-comfortable-Seagate-is dept

Just a few weeks ago, we noted that Seagate’s CEO appeared to be admitting that his company didn’t have a real strategy to compete with the growing threat of solid-state flash drives competing against traditional hard drives. Instead, he said that if the competition got too hot, he’d just sue for patent infringement. Basically, he was admitting that he was planning to use patents in exactly the opposite of the way they were intended to be used. He’d use them to block an innovative new competitor, but only once that competition became serious enough. Apparently, Seagate believes that moment is now, as we’re seeing more and more laptops hit the market with solid state drives, so Seagate has filed its first patent infringement lawsuit against a maker of the technology. Basically, the company is admitting that it can’t actually compete or make a better product, so its strategy is to sue competitors. It’s a pretty weak response, but thanks to our patent system, it may be perfectly legal (if exactly the opposite of what the patent system intended).

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Comments on “Seagate Decides It Can't Compete With Solid State; Sues Over Patents”

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40 Comments
Anonymoussays:

Re: ...

Agreed. Pity about Seagate.

The usual plan is for a dominant company to buy up one of the companies supplying the new technology. Doesn’t really have to be the leading company. After providing the resouces, and integration into the existing product line, you end up with a new leading provider of the new technology…

I guess I just brought my last Seagate drive (argh!). I figure by the time I need to replace it, I’ll be hearing warnings about Seagate drives similar to the ones about Maxtor.

W. Monroysays:

Re: ...

I am from Seagate, and we do plan to become an awesome maker of SSD, and have been involved in flash since the 90s. Stay tuned. In the meantime, here is our open letter on the issue of innovation and IP protection:
Open Letter from Bill Watkins on Innovation and Intellectual Property

April 14, 2008

Today I would like to address an important issue currently facing the storage industry: innovation and the protection of intellectual property at a time of technological convergence.

As a whole, our industry is in a very strong position. The explosion of digital content has created global demand for storage products that will only increase as the world becomes more digitally oriented and connected. Recent advances in storage technologies are beginning to blur the line between what had previously been distinct segments in the storage industry. These advances are resulting in faster, smaller products capable of storing more data in increasingly secure forms.

Seagate is at the forefront of those advances. Over the past 10 years, we have invested $7 billion in research and development and have more than 3,900 United States patents in our portfolio. This is one of our core strengths and has consistently made us a global leader in storage. We have a widely recognized history of innovating and embracing promising technologies to better serve our customers and make our own enterprise more competitive.

Of course, while we enjoy a leadership position, we are not alone in efforts to innovate. Other storage companies are also focusing R&D resources on next-generation products, and we welcome this competition as we believe it drives innovation, benefits customers and results in a host of other benefits to our increasingly digital world.

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. 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.

So today, we have initiated a patent infringement lawsuit against STEC, Inc. based on our belief that STEC is infringing a number of Seagate?s U.S. patents.

As we hold key patents on nearly every form of storage technology, I expect pressures on our competitors will mount and we may see additional encroachment on our intellectual property. Of course, 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. We believe the pace of innovation could increase exponentially as a result of these types of commercial relations. However, until the underlying infringment is stopped, it is necessary for us to take all of the required steps, including legal action against those parties who are improperly utilizing Seagate?s IP.

As there has already been some speculation in the press about our motives for pursuing these legal claims, let me be clear: 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. What this lawsuit is about is preserving for our shareholders the value we have created by building an industry-leading patent portfolio.

Bill Watkins
CEO, Seagate Technology

arbulussays:

Re: Re: ...

“As we hold key patents on nearly every form of storage technology, I expect pressures on our competitors will mount and we may see additional encroachment on our intellectual property. Of course, 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. We believe the pace of innovation could increase exponentially as a result of these types of commercial relations. However, until the underlying infringment is stopped, it is necessary for us to take all of the required steps, including legal action against those parties who are improperly utilizing Seagate?s IP.

As there has already been some speculation in the press about our motives for pursuing these legal claims, let me be clear: This is not about stifling innovation or threats to our business from solid state technology.”

I believe this statement directly contradicts the actions being taken.

What this says basically is: “We hold all the keys and we have taken steps to make sure we hold them all. Now we own IP in all forms of storage and if anyone else tries to make some new form or storage, we’re going to bring the hammer down on them.”

This directly contradicts the statement that this is not about stifling innovation. Because completely the opposite is true. Seagate does not want anyone else to be able to compete in the market or develop new technologies and is going to sue anyone who tries. Stifling innovation is exactly what that is. Hoarding patents just so you can sue people who violate them is the definition of being a patent troll. And it seems that Seagate has entered that arena.

Instead of trolling, why doesn’t Seagate wow the market with a new SSD that’s better than others on the market? Why try to win market share and mind share in the courts (because it will only fail), why not do it where it belongs: in the marketplace?

MLSsays:

Re: Re: ...

Mr. Monroy,

You are indeed a brave man to step into a lions den where:

1. Everything is deemed obvious by most who comment.

2. Few understand what a patent actually comprises.

3. Patents are an annoyance and stifle innovation.

4. A company that relies on patents to sue competitiors should be derided because they are obviously bent on protecting their current turf and out-of-date products.

5. Most companies that use the patent system do not invest heavily in research and development, preferring instead to rely on past accomplishments.

Your CEO could have chosen his words more wisely, but even so there is nothing fundamentally wrong with using a strong portfolio of patents to secure business relationships favorable to all the parties concerned.

Re: Re: Re: ...

MLS,

Your statements are amazingly unfair and inaccurate. I’m rather surprised, given that you’re normally quite level-headed.

1. Everything is deemed obvious by most who comment.

This is untrue. While we do often comment on the obviousness of certain patents, we usually point to evidence to back that up. Also, the reason why so many of the patents we discuss are pointed out as obvious is because it’s those obvious patents that we write about — because those are the most problematic.

2. Few understand what a patent actually comprises.

Can you paint with a broader brush? It’s true that not everyone here knows the details of what’s in a patent, but plenty of people do.

3. Patents are an annoyance and stifle innovation.

You say this ignoring the fact that we don’t just claim it — we point out evidence (including academic research, historical examples, and individual examples — as well as a full explanation of why patents stifle innovation) to back it up. To phrase it the way you do implies none of that happened. Sneaky… but inaccurate.

4. A company that relies on patents to sue competitiors should be derided because they are obviously bent on protecting their current turf and out-of-date products.

Again, if that’s the case, why shouldn’t we point it out?

5. Most companies that use the patent system do not invest heavily in research and development, preferring instead to rely on past accomplishments.

Hmm. We’ve never said that. Plenty invest in R&D. The actual complaint, which you have mischaracterized here is that those with patents do not innovate at the same pace or in the same manner as those in places without a patent system. That’s based on historical evidence. That doesn’t mean that those who hold patents don’t invest in R&D. But the R&D is often focused on getting more patents — not on actually innovating in the marketplace. And that’s our concern. Again, this is based on historical evidence.

Yet, you imply otherwise.


Your CEO could have chosen his words more wisely, but even so there is nothing fundamentally wrong with using a strong portfolio of patents to secure business relationships favorable to all the parties concerned.

The only party that benefits in this case is Seagate. I don’t consider that “favorable to all parties concerned.” I consider that to be classic rent seeking behavior, which any economist will tell you is problematic.

MLSsays:

Re: Re: Re: Re: ...

My comments were merely anecdotal observations based upon many of the posts I have read by those responding to articles posted by you and other member of the Techdirt staff. Whereas you and the other members of the staff do attempt to point out support for the comments made in the articles, few of those responding to the articles make any attempt to do likewise. While I oftentimes disagree with some of the contents in the articles, as well as some of the material cited in support of what is contained in the articles, I do respect any and all efforts to have an intellectually honest debate.

Anonymoussays:

At the Above

#1 & #2:
Not trying to troll/flame but seriously. Why lock your self in to that one brand of hard drives? They may be better than Maxtor, but I’ve had more Seagate hard drives fail on me than Western Digital and the way the company acts in regards to customer service and this kind of thing is abysmal.

I can understand fanboism of AMD-ATI/NVIDIA better than this. I’m just total at a loss to explain why you would lock yourself in to this company willingly, when their competition offers the same size hard drives at the same prices with similar warranties.

@ #3 Same. I stopped buying them after having to RMA far too many (they’re greatness has slipped quite a bit lately, far lower yields of good drives to their old standards).

This is patent troll behavior. Only difference between Seagate and patent trolls is Seagate actually has a marketable product at the moment.

Overcastsays:

“In the suit, Seagate contends that STEC?s solid-state drive products violate four Seagate patents covering how such drives interface with computers.”

So why haven’t they already sued Western Digital and other Hard Disk manufacturers? What about thumb drives? Same technology – why not sue them too?

I agree with #1 too – there’s room in my system for both. If the SSD’s are mega-fast, I’d toss the OS and pagefile there, and use regular HDD’s for data storage – seems simple; as long as they offer more in terms of capacity, I don’t see where it’s an issue.

But as a consumer – it tells me something – Seagate is fresh out of ideas…. seems reminiscent of many other past companies.

Lawrence D'Oliveirosays:

What's Wrong?

A patent is a grant of a monopoly. Being a monopoly, it means you’re allowed to shut out competition. So if Seagate has patents that it can use to shut out competition, why shouldn’t it be allowed to use them? Isn’t that the essence of what patents are about? If you’re against that, you’re against patents.

Re: What's Wrong?

A patent is a grant of a monopoly. Being a monopoly, it means you’re allowed to shut out competition.

Of the same technology… This is Seagate blocking a totally different technology.

It also assumes that the patent in question is valid.

If you’re against that, you’re against patents.

As I thought I’ve made clear, I’m against a patent system that hinders innovation — which suggests that I’m against almost all patents, as they’ve been shown not to encourage innovation, but to hinder it.

Anonymoussays:

Re: What's Wrong?

A patent is a grant of a monopoly. Being a monopoly, it means you’re allowed to shut out competition. So if Seagate has patents that it can use to shut out competition, why shouldn’t it be allowed to use them? Isn’t that the essence of what patents are about? If you’re against that, you’re against patents.

OK, so I’m against patents. You explained it quite well, thank you.

Jakesays:

I don’t know what it’s like in the United States, but there are a couple of strong precedents in European law in favour of dismissing a civil suit that is not brought within a reasonable period of time. And seeing as Seagate’s CEO outright admitted that he was intending to commit blackmail with these patents -in the Wall Street Journal no less- I would actually be surprised if this didn’t backfire on them rather spectacularly.

DanCsays:

Re:

Isn’t it jumping the gun a bit by lambasting Seagate without having any information in hand about what these patents cover?

The lambasting is deserved for Seagate’s CEO’s statements prior to this lawsuit, where he basically said that if the market for SSD flash drives stabilized, Seagate would resort to litigation.

Basically, he said there wasn’t enough money in SSD market at that point to warrant a lawsuit. Admitting, in a public forum, that you’re simply going to wait for enough competitors to enter a market before suing them for patent infringement deserves (quite a bit more than) criticism over business ethics and manipulating the intent of the patent system.

arbulussays:

It’s a sign of our times: CompanyX realises that technology is changing and they are incapable or unwilling to adapt to changes in the market and change to meet the new needs of consumers, so CompanyX just sues any possible competitor and customers of those competitors. Because if they can’t get their money in the market place, they decide to get it in court. You see it all the time, the entertainment industry being the most prominent. The record companies refuse to adapt to the digital age, so like a three-year-old child, they throw a tantrum because no one is buying their products any more and just sue people for no reason whatsoever and then try to pass legislation to make it illegal to compete with them or to not buy their products.

Corporate America needs to wake up and realize that they do NOT have guaranteed existence, they do not have guaranteed revenue, they do not have guaranteed customer base and that they cannot create laws, or manipulate existing ones, to force consumers to patronize them. But the problem is that copyright and patent law feeds this mindset and only fuels this litigation nightmare and corporate tantrum mentality.

If Seagate cannot adapt to new technologies and innovate and change with the times, then they should fail as a company. Their existence is not guaranteed, nor should it be. If they cannot adapt and create products that the customers want and are relevant in the marketplace and offer a solid competition on a level playing field with the others in the market, then they should fail.

StorageMeistersays:

The Actual Patents, In Case Anyone's Interested...

There are four patents being asserted by Seagate:

6,404,647 (“Solid-State Mass Memory Storage Device”)
6,849,480 (“Surface Mount IC Stacking Method and Device”)
6,336,174 (“Hardware Assisted Memory Backup System and Method”)
7,042,664 (“Method and System for Host Programmable Data Storage Device Self-Testing”)

It looks like the first patent listed above (647) was bought by Seagate from Hewlett-Packard! The other ones seem to have originated with Seagate or Maxtor (which is now part of Seagate). They all seem to have fairly late filing dates considering the breadth of many of the claims, which suggests they may be invalid. (Perhaps what’s why they went after a small player who may not have the finances to underwrite a serious invalidity challenge.)

Etchsays:

BS

This whole patent thing is getting very annoying!
Unless others physically stole their code and applied it to their devices, then Seagate has no right to open their mouth! This is very counter-productive, and just because they have the “way the device interfaces with the PC” patented (which should NEVER have been allowed to be patented in the first place) doesn’t mean that others stole their idea, someone was going to come up with a way to do it anyways, and they just happened to patent it first! What Bullshit.

It is only through building on what others have achieved do we truly innovate and improve, the strength in Seagate’s products isn’t the “patented” way of accessing the drives, its the drive itself!

Etchsays:

Re: BS

Just to add: If they indeed spent 7 Billion on research, and since they don’t have any SSD drives yet, then shouldn’t the technology be kept secret? If other companies are using it, doesn’t it mean that they developed their own way of doing it? (unless they hacked into their systems and stole their research?) I mean, Seagate didn’t release their findings into the public sector (especially in regards to SSDs), and let everyone else use it to develope their own method of accessing the Drive, and then turn around and sue them?
I’m not sure I have a good grasp of the events here.
Something doesn’t add up!

Rekrulsays:

Maybe you should start shopping in 2008 then, rather than whatever year you’re stuck in. I just went to Tiger Direct and found a 12GB USB drive for $46, a 2GB for $15, a 1GB for $10, and so on. Add a few bucks ($3?) for shipping and we’re still nowhere near your quote.

I’ll take your word for it. I went to Tiger Direct, typed USB Flash Drive into the search box, waited about two minutes and then gave up when the results still hadn’t loaded. My prices were based on what I’ve seen in local stores.

And…. Windows 98?? Still?

Yes, still. I can access the net, run P2P programs, play downloaded movies, play DVDs, burn DVDs, import images from my digital camera, print (when I’m willing to part with $45 for enough ink to print a measely couple dozen pages), run emulators, etc.

Anything that I can’t currently do with Windows 98SE, like run recent games or play Blu-Ray discs, would take a more powerful system anyway.

Nobody has yet been able to give me a compelling reason that I should install XP on this system and lose compatibility with some older software. Their arguments usually boil down to “It’s old!” or “Microsoft doesn’t support it anymore!” Well, I haven’t noticed any funny smells coming from my computer so I guess it hasn’t gone bad yet. As for Microsoft support, I haven’t needed anything from them in years. ­čÖé

Anonymoussays:

Re:

Nobody has yet been able to give me a compelling reason that I should install XP on this system and lose compatibility with some older software. Their arguments usually boil down to “It’s old!” or “Microsoft doesn’t support it anymore!”

Dude, you really shouldn’t have that thing on the internet. “Microsoft doesn’t support it anymore” means that they are also no longer issuing patches to keep it from being root-kitted or owned by some botnet or otherwise compromised. In other words, just because it’s still running doesn’t mean that everything is OK with it. If you want to keep using it that’s fine and I understand that, just be responsible and do the rest of us a favor and keep it off the internet.

Rekrulsays:

Dude, you really shouldn’t have that thing on the internet. “Microsoft doesn’t support it anymore” means that they are also no longer issuing patches to keep it from being root-kitted or owned by some botnet or otherwise compromised. In other words, just because it’s still running doesn’t mean that everything is OK with it. If you want to keep using it that’s fine and I understand that, just be responsible and do the rest of us a favor and keep it off the internet.

On the other hand, it means that most of the major security flaws have been found and patched, unlike XP and Vista which still have more holes than a piece of Swiss cheese. Seriously, the last several major security problems MS reported on have affected NT, 2K, XP and latesly, Vista, but not 98. For example, remember the big panic a few years ago about how a flaw in the way Windows handles jpeg images could lead to your system being infected? Guess what, it only affected XP, .NET and other recent crap from MS. Older versions, like 98 weren’t at risk.

I have a firewall and my virus definitions are up to date. I also scan for malware. In addition, since 98 is no longer considered to be a current OS, all the crapware is now being written for XP and above. ­čÖé

Security Specialistsays:

Re:

On the other hand, it means that most of the major security flaws have been found and patched,…

It means no such thing. I don’t even see how a rational person could come to such a conclusion. In fact, 98 is so bad that Microsoft finally just gave up on it.

Seriously, the last several major security problems MS reported on have affected NT, 2K, XP and latesly, Vista, but not 98.

What part of “no longer supported” don’t you understand? Microsoft isn’t even looking for or paying any attention to flaws in Windows 98 so of course they aren’t reporting or patching them. That in no way means that Windows 98 has achieved some sort of perfection.

I have a firewall and my virus definitions are up to date. I also scan for malware. That’s all fine and dandy but it won’t protect you from unpatched OS security vulnerabilities. Basically, you’re a botnet builder’s dream come true.

And you really believe that Windows 98 was Microsoft’s most secure operating system ever? Wow. I’m just flabbergasted. Especially noteworthy is your apparent belief that you are more knowledgeable than the vast majority off computer security specialists or even Microsoft itself concerning it’s own products. What a remarkable combination of ignorance mixed with arrogance. That all makes this post worth bookmarking for future reference. Good luck trying to live it down. (Maybe you should just change your name now)

Kevinsays:

Good ridance to the Hard Drive. Hard drives are old archaic technology that constantly threatens the data stored on them and won’t really be missed. I’ll be glad that I won’t have to be so freakin careful not to bump my computer and cause a crash or worry about mechanical failure plus all the noise(whine). Get with the program Seagate!

Rekrulsays:

It means no such thing. I don’t even see how a rational person could come to such a conclusion. In fact, 98 is so bad that Microsoft finally just gave up on it.

I’ve got news for you, Microsoft doesn’t just “give up” on products (well, they might for Vista…), they intentionally throw them away. It’s called “Planned Obsolescence” It’s what MS’s entire business model is based on. If they can’t keep convincing people to dump what they already have and buy something new, they’d go out of business. They have a vested interest in getting people to upgrade and it has nothing to do with making their systems more secure, or giving them more features.

What part of “no longer supported” don’t you understand? Microsoft isn’t even looking for or paying any attention to flaws in Windows 98 so of course they aren’t reporting or patching them.

Let me see if I understand your logic;

Windows needs constant patching from Microsoft to remain secure. MS is currently writing patches for XP and Vista to patch security flaws. This indicates that both systems have security flaws. The importance you place on on-going updates from MS also indicates that you believe that both versions will have security flaws right up until MS ends support for them.

By this logic, your system at this very moment is full of security flaws just waiting to be exploited. In other words, your system isn’t secure either, hackers just haven’t found the holes yet.

I have a couple friends with XP. They’re always having problems with malware and viruses. They update their systems on a regular basis (when MS Update co-operates) and yet they still have problems. Of course they use Internet Explorer and the Windows firewall, but I’m sure that has nothing to do with it…

That in no way means that Windows 98 has achieved some sort of perfection.

I never said it had, just that most of the major flaws had been fixed.

Consider this; The longer an OS is in use, the more familiar the programmers get with it. With each patch, it becomes more secure. The intelligent thing then is to continue patching an OS until you get as close to perfection as you can. So rather than keep patching 98 and making it more secure they dump it and introduce XP with a whole new slew of security flaws, which they’re still patching today. Then, do they continue working on XP to make it the best, most stable OS they can? No! They dump it and introduce Vista, with a whole new batch of flaws! The only reason they’re still working on XP at all is that Vista is a huge flop and people still want XP.

Sure, MS may work on increasing security with each new version of Windows, but do you really think they’re doing it out of a desire to make the computing world safer, or do they just want to pad their bottom line?

That’s all fine and dandy but it won’t protect you from unpatched OS security vulnerabilities. Basically, you’re a botnet builder’s dream come true.

And the botnet builders are all devoting their time and effort into finding security flaws in Windows 98 so that they can take over the legions of 98 systems that people are still using, right?

And you really believe that Windows 98 was Microsoft’s most secure operating system ever?

Where did I ever say that?

Wow. I’m just flabbergasted. Especially noteworthy is your apparent belief that you are more knowledgeable than the vast majority off computer security specialists

To be fair, I did a search for major security flaws in 98. Know what I found? Every one relies on a flaw in Internet Explorer, or Outlook Express, or Windows Media Player (threee programs I almost never use) or on getting the user to run a trojan on their system. I couldn’t find anything saying that a hacker can just gain access to someone’s system because they’re using 98.

Can you point me to any sites that describe ways that a 98 system can be taken over that don’t rely on using one of the above MS programs?

or even Microsoft itself concerning it’s own products.

Yes, we all know that Microsoft only has your best interest at heart when they recommend that you go out and spend $200-500 on a new OS. Someone should nominate them for sainthood!

Have you bought your copy of Vista yet?

What a remarkable combination of ignorance mixed with arrogance. That all makes this post worth bookmarking for future reference. Good luck trying to live it down. (Maybe you should just change your name now)

I’ve been using this same system on the net for about 5 years now. First with dialup and for the last year and a half, with DSL. When using dialup, I didn’t even have a firewall installed.

A virus scan comes up negative. A malware scan comes up negative. A process monitor shows no unknown processes running. When I close all programs that are actively using the net, such as P2P programs, or newsreaders, my bandwidth usage drops to 0 indicating that nothing on my system is either sending or receiving data.

How do you explain this, considering the fact that you seem to regard having a 98 system on the net as a virtual certainty that it will be taken over by hackers?

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