Seagate Technology just might have a few patents that make the rest of the storage industry squirm.
Earlier this week, Seagate, the world's largest hard-drive maker, announced that it was suing STEC, alleging that the company violated four of its patents and other intellectual property.
The patents largely revolve around how a manufacturer would take flash memory and make it into a functioning hard drive. Seagate's hard drives store data on magnetic platters. There is more to the drive than the platters, however. Getting the data off of the platters and into a processor requires interfaces, controllers, and other hardware. Seagate's suit essentially states that although STEC might be using flash memory in its drives, the overall construction of its drives infringes on Seagate's patents.
And this one seems to be the big patent in the bunch: U.S. Patent No. 6,404,647 for a solid-state mass memory storage device. It was filed by Hewlett-Packard in 2000, and the U.S. Patent Office issued it in 2002. Seagate acquired it from HP some years back.
"The present disclosure relates to a solid-state mass memory storage device. More particularly, the disclosure relates to a semiconductor mass memory storage device suitable for disk drive replacement," the patent states.
The full patent is far longer, but that's the gist of it. It appears to describe a solid-state drive that could replace a standard hard drive. Seagate isn't talking a lot about the details of the suit, but CEO Bill Watkins said, "STEC is not the only company we are looking at."
Can a company really patent the concept of a solid-state drive? Determining the scope of patents like this could take years, said Jim Porter, an analyst at Disk/Trends. (We've also only examined it for a while but will do more research and talk to experts. The other patents are Nos. 6,849,480; 6,336,174; and 7,042,664.) Rodine sued a raft of hard-drive makers in the 1990s over its patents for a design for a 3.5-inch drive. The industry eventually went toward 3.25-inch form factors. But the suits were filed, and for a while they sent shivers down the spine of some executives.
If Seagate decides to broadly press its claims and prevails, the patents collectively could be worth millions. They could entitle Seagate to get a few dollars for every solid-state hard drive shipping out the door from manufacturers worldwide. DVD manufacturers pay around $15 to three sets of patent holders for every DVD player they ship. Philips and Sony reaped millions in royalties for inventing the CD. The Blu-ray Disc/HD DVD war centered on royalties. It's a good business too--you basically wait for the check, once you wade through expensive and hard-fought litigation.
So if the patent is so good why would Seagate go after STEC? To set an example. In the tech world, companies typically don't like to sign license and royalty agreements. Potential licensees often make the patent holder sue one or more companies first. If the potential licensees prevail, the conflict can fade away.
If the patent holder prevails in court, other potential defendants line up to sign deals.
STEC is a small player. If it wins, other industry players will applaud its pluck. If it loses, other manufacturers of flash drives like Intel, Toshiba, and SanDisk might decide to line up dutifully to pay Seagate royalties. And since there may not be a pre-existing lawsuit, there won't be as much bad blood.
"They (Seagate) have always been willing to license," Porter said.