Western Digital OK’s $4-Million Patent Suit Settlement

Western Digital Corp., a personal computer components manufacturer, said Wednesday it has agreed to pay $4 million to Quantum Corp. to settle a 2-year-old patent-infringement lawsuit involving computer hard-disk drive technology.

Quantum, a Milpitas disk drive manufacturer, sued Western Digital in May, 1988, claiming the Irvine firm was illegally using technology patented by Quantum for an early generation of computer disk drives and a line of disk drive add-on products.

Irvine-based Western Digital acquired the disk drive technology when it bought Tandon Corp. in 1988. Western Digital no longer makes the disk drives and, as part of the settlement, will discontinue sales of the add-on products in January, 1991.

Western Digital set aside the $4 million in reserves to cover potential costs of a settlement, and the payment will have no impact on current or future earnings, said Robert Blair, a Western Digital spokesman. Western Digital did not acknowledge any infringement in the settlement.

Blair said the settlement affects what was a relatively small part of the company’s sales of computer storage products. The technology has since been superseded by the company’s 3.5-inch intelligent disk drive products.

Quantum also has received settlement payments of $3 million from NEC Corp. and $6 million from Computer Memories Inc. as a result of patent-infringement suits involving the same designs at issue in the Western Digital case. Quantum also received an undisclosed settlement from Mountain Computer Inc. regarding the add-on product technology.

Liz Baird, spokeswoman for Quantum, said the company was pleased that the settlement allowed it to get all of the relief it asked for in the lawsuit, including a discontinuation of the add-on line. She said the company still has an infringement suit pending against Tandon for which Western Digital is not legally responsible.