Patent Law

Erika Brown reported today, April 15, 2008, at Forbes that:

Hard-disk drive industry leader Seagate Technologies filed a suit on Monday against a competitor, STEC, a maker of solid-state drives, alleging patent violations. The move could set an important precedent and stall the solid-state storage industry.

At issue are patents related to sophisticated, arcane technology such as "surface mount stacking method and device," "hardware assisted memory backup system and method," and "method and system for host programmable data storage device self-testing."

"It's a pretty big deal," said Joseph Unsworth, a research director at Gartner. "Seagate is a formidable company and a leader in hard drives. If Seagate is victorious, this suit will stifle innovation."

Seagate (nyse: STX), a giant in the disk drive industry with $12 billion in annual revenue, has been under severe pressure in recent years owing to advances in solid-state storage technology, an area in which STEC, a $190 million-a-year revenue piker, is making significant progress. STEC (nasdaq: STEC), based in Santa Ana, Calif., is leading the charge in developing the brains of solid-state drives, known as controllers. STEC's systems help compensate for the weaknesses of flash memory chips, namely the lack of speed and reliability. In January, STEC announced a deal with longtime Seagate rival EMC (nyse: EMC) to collaborate on a high-end networked storage system.

STEC's legal team was still reading the complaint when Forbes called for a comment Monday afternoon. An official announcement is expected sometime Tuesday.

Read the full article here.