Feeds

WD slips bullet between teeth, gets ready to hand $706 MEELLION to Seagate

Alright guys, change the black ink refills for red. Dammit

Internet Security Threat Report 2014

Western Digital is preparing to pay Seagate $706 million for using Seagate trade secrets.

Needless to say WD is appealing against the Arbitration Court’s decision in favour of Seagate but may have to cough up the readies if its petition for review with the Minnesota Supreme Court fails.

If that happens then WD’s net income for its fourth fiscal 2013 quarter changes to a $265 million loss from the previously recorded $416 million profit.

The whole affair started when Seagate filed a complaint seven years ago, in October 2006, claiming WD had recruited Doctor Sining Mao, an ex-Seagate employee, who had taken trade secrets with him which the Digitales had then used.

Mao had been at Seagate for 11 years and was senior director for advanced head concepts when he left. He joined WD as a VP responsible for wafer design and technology, and Seagate claimed he passed on trade secrets relating to TMR (Tunnelling Magneto-Resistnce) technology, enabling WD to build an MgO TMR read head many months before it would otherwise have been able to do so.

WD requested the dispute go to arbitration, after Seagate pointed out Mao’s employment agreement included an arbitration clause to resolve disagreements over his employment.

This clause said:

”The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration.”

The arbitration process went ahead and found in favour of Seagate. Amongst other things the arbitrator found “that Mao had fabricated documents intended to prove that three of the trade secrets—referenced as Trade Secrets 4-6—had been publicly disclosed before Mao left Seagate. The fabrication involved Mao’s addition of two PowerPoint slides to his copy of a presentation that he had given while still employed by Seagate.”

Bad move.

WD has stated:

"In light of uncertainties, including the fact that the review of the Appellate Court’s decision by the Minnesota Supreme Court is discretionary, the Company has determined it will record an accrual of $681 million for this matter in its financial statements for the three months ended June 28, 2013. This amount is in addition to the $25 million previously accrued in the fourth quarter of fiscal 2011."

So Seagate could get a massive present of nearly three quarters of a billion dollars - lucky Luczo.

Mao’s LinkedIn profile shows he served at WD until January last year.

It could turn out to be a very expensive six years indeed for WD. ®

Beginner's guide to SSL certificates

More from The Register

next story
Docker's app containers are coming to Windows Server, says Microsoft
MS chases app deployment speeds already enjoyed by Linux devs
'Hmm, why CAN'T I run a water pipe through that rack of media servers?'
Leaving Las Vegas for Armenia kludging and Dubai dune bashing
'Urika': Cray unveils new 1,500-core big data crunching monster
6TB of DRAM, 38TB of SSD flash and 120TB of disk storage
Facebook slurps 'paste sites' for STOLEN passwords, sprinkles on hash and salt
Zuck's ad empire DOESN'T see details in plain text. Phew!
SDI wars: WTF is software defined infrastructure?
This time we play for ALL the marbles
Windows 10: Forget Cloudobile, put Security and Privacy First
But - dammit - It would be insane to say 'don't collect, because NSA'
Oracle hires former SAP exec for cloudy push
'We know Larry said cloud was gibberish, and insane, and idiotic, but...'
Symantec backs out of Backup Exec: Plans to can appliance in Jan
Will still provide support to existing customers
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.