Western Digital Bought Patent Problems When It Acquired Hard Disk Operation

When Western Digital acquired Tandon Corp.’s hard-disk manufacturing operation for nearly $80 million earlier this year, it may have gotten more than it bargained for.

The Irvine computer equipment maker has been sued for patent infringement by Quantum, a Silicon Valley manufacturer of data storage devices for computers.

Quantum’s suit, announced Monday, alleges that several of the products Western Digital acquired when it bought Tandon’s hard-disk business--including the Filecard, a hard disk mounted on an add-on circuit board--were based on patented Quantum designs.

A spokesman for Western Digital said the company’s attorneys are reviewing the suit and declined comment until that review is completed.

Quantum had notified Tandon of its concerns about a potential patent infringement before the Western Digital acquisition, said Joe Rodgers, Quantum’s executive vice president for finance. For that reason, he said, Quantum believes Western Digital officials knew about the problem when they acquired the Tandon division.

The suit was filed by Quantum and its wholly owned subsidiary, Plus Development Corp., in U.S. District Court in San Francisco.

Stephen M. Berkley, Quantum chairman and chief executive officer said the company, which has won two prior patent infringement suits and currently is prosecuting a third, “will continue to defend our intellectual property rights vigorously.”

The big reason for that vigor is money.

The suit alleges that the Western Digital Filecard was based on designs patented for the Hardcard internal hard disk developed by Plus. The Hardcard was the first hard disk installed on a plug-in expansion board and has been popular with personal computer users. Sales of the Hardcard accounted for almost 40% of Quantum’s revenue in its fiscal 1988, Berkley said.

A second part of the suit alleges that the internal architecture of a Tandon-built disk drive acquired by Western Digital also was based at least in part on a design patented by Quantum.

A disk drive is the device that reads information stored on a magnetic disk and then “writes” it to the computer screen. A hard disk is a magnetic disk capable of storing thousands of times more information than a soft, or floppy disk.

Architecture refers to the components of a specific piece of hardware and the manner in which they are linked.

Quantum claims that its “wedge-servo” architecture enables its disk drives to process and retrieve information with exceptional speed and has given the company, in Berkley’s words, “a significant competitive advantage over the years.”