Patent War Looming over Solid State Drives

Implications: * Seagate says that if SSDs start to threaten HDDs Seagate may sue SSD companies such as Intel and Samsung for patent infringement  * Seagate and WD have patents with many of the ways that a storage device communicates with a computer and SSDs may use some of these approaches  * SSDs are being introduced in laptops and other applications where hard disk drives have traditionally been used  * Seagate said that it would ship SSDs in 2008 and WD has had a long standing relationship with SanDisk, a major flash memory producer  * SanDisk has its own set of flash memory and possibly SSD patents through its M-Systems acquisition so there may be an interesting patent war brewing

Analysis: Seagate’s CEO, Bill Watkins, said that SSD companies may violate patents held by hard disk drive companies.  HDD companies such as Seagate and Western Digital have license sharing agreements on hard disk drive technology that allows them to use each others technology in many of their products.  Among the patent technologies referred to are communications protocols and methods for storage devices with computers.  Seagate has indicted that the company may sue SDD manufacturers if SSDs threaten HDD sales.  

Seagate and other hard disk drive companies were able to use patent violation suits to effectively stop the development of 1-inch disk drives by start-up company, Cornice a few years ago.  They may have in mind a similar approach to stop SSD companies that start to compete against HDDs. 

The situation with SSDs may be different than was the case with 1-inch hard disk drives.   Western Digital has a very close relationship and an extensive history with SanDisk, a major manufacturer and pioneer of flash memory devices, including SSDs.  Although WD has not announced a SSD product this relationship could give them access to SanDisk’s extensive patent portfolio and if WD creates a cross-license deal with SanDisk there could be an interesting foil to Seagate’s potential suit against other SSD makers.  

In addition SanDisk has its own extensive patented IP for flash memory cards and other devices and the company has a long history of going after and collecting from potential patent infringers.  An estimated 30% of SanDisk’s net profit comes from royalties for the company's many patents.  It is possible that Seagate could itself face potential patent suits from at least SanDisk when it rolls out its SSD products.  

The various players are trying to claim their IP and it is likely that there will be some suits pressed by many of the competitors in SSDs against each other as this market develops.  In the long run it is likely that SSD manufacturers will join in some sort of cross-licensing arrangement similar to that that HDDs makers have for many of their products.