Feeds

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

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

HP ProLiant Gen8: Integrated lifecycle automation

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. ®

Reducing security risks from open source software

More from The Register

next story
Sysadmin Day 2014: Quick, there's still time to get the beers in
He walked over the broken glass, killed the thugs... and er... reconnected the cables*
SHOCK and AWS: The fall of Amazon's deflationary cloud
Just as Jeff Bezos did to books and CDs, Amazon's rivals are now doing to it
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
US judge: YES, cops or feds so can slurp an ENTIRE Gmail account
Crooks don't have folders labelled 'drug records', opines NY beak
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
BlackBerry: Toss the server, mate... BES is in the CLOUD now
BlackBerry Enterprise Services takes aim at SMEs - but there's a catch
The triumph of VVOL: Everyone's jumping into bed with VMware
'Bandwagon'? Yes, we're on it and so what, say big dogs
Carbon tax repeal won't see data centre operators cut prices
Rackspace says electricity isn't a major cost, Equinix promises 'no levy'
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.