Seagate Technology Countersues IBM Over Hiring

Seagate Technology Inc. said Thursday that it filed a countersuit against International Business Machines Corp., claiming that IBM has engaged in unfair business practices by ddnattempting to block current and former employees from working for competitors.

The suit, which seeks damages and an injunction against IBM, was filed in U.S. District Court in St. Paul, Minn.

Seagate President Alan Shugart told a news conference that IBM has threatened and harassed his company and former IBM employees now working for it “in an effort to coerce Seagate and others like us from hiring IBM employees.” In October, 1991, IBM filed suit in the same court against Seagate and a former IBM employee, Peter Bonyhard, who had been hired by Seagate to manage its development program for magnetoresistive (MR) head technology for disk drives.

The technology is expected to expand disk storage capacity by as much as 10 times over current drives, Shugart said.

The IBM suit alleged that Bonyhard unlawfully transferred IBM technology to Seagate. In December, the court found IBM had not established that the technology transfer took place, but ordered that Bonyhard be removed from the MR development position at Seagate. Shugart said Seagate had taken steps to prevent the transfer of IBM trade secrets. Seagate had “a unique design for the MR head” which it acquired with its acquisition of the Imprimis division of Control Data Corp. in 1989.

Shugart said the removal of Bonyhard from MR research has hurt the company’s efforts at developing MR technology.

“We’ve been damaged, our program has been delayed,” Shugart said.

Nevertheless, the company expects to announce a disk drive product with MR heads in calendar 1992, with shipments to begin in 1993, Shugart said.

A hearing on Seagate’s appeal of the Bonyhard decision is scheduled March 11.