Western Digital, one of the leading companies in the data storage sector, has been ordered to pay 315.7 million dollars for violating patents related to data encryption technologies. This verdict comes at a crucial time for the company, which is in the process of separating from SanDisk, with which it shared its flash storage division and SSD technology.
The lawsuit was filed in 2016 by SPEX Technologies, who accused Western Digital of infringing two patents originally granted to Spyrus, a cryptography company that developed key technology for encrypting sensitive communications. The patents in question, dating back to 1997, cover operations related to peripheral devices that enable security functions on stored data. These devices include technologies such as Compact Flash and PCMCIA cards, which were widely used before new storage solutions arrived.
Although the patents expired in 2017, the lawsuit was filed before that date, allowing the courts to consider the claim valid. A federal court in California ruled that various Western Digital products, including the Ultrastar, My Book, and My Passport self-encrypting drives, infringed SPEX’s patents. The California company has expressed disagreement with the ruling and announced plans to appeal the decision.
This is not the only recent legal setback for Western Digital. In July of this year, another similar lawsuit resulted in a judgment of over 262 million dollars for infringing patents related to increasing storage capacity in hard drives.
Meanwhile, Western Digital continues with its separation from SanDisk, announced in 2023. This process has led to the creation of two distinct brands operating under separate websites. Western Digital will focus on HDD products and storage platforms, while SanDisk will specialize in flash storage devices, including SSDs, memory cards, and USB flash drives.
The company has stated that this decision aims to improve the positioning of each brand, allowing for a more innovative and efficient approach to product and technology development, as well as leveraging growth opportunities in their respective markets. Moving forward, Western Digital products such as WD, WD_Black, and SanDisk Professional will be available on the Western Digital website, while flash technology-related products will be marketed through the SanDisk site.
The judicial ruling is a significant blow to Western Digital at a critical time for the company. While the company is confident it can overturn the verdict through appeals, the financial and reputational impact could affect its market position. Additionally, the separation from SanDisk poses new challenges for both brands as they adjust to their new roles in a highly competitive sector.
Western Digital, which has repeatedly denied the infringement allegations, faces a series of legal and business challenges that could determine its future in the data storage industry.
Source: Reuters.