MIT & Startup Sue Hard Drive Manufacturer Seagate

A decade-long lawsuit pitting a tiny company called Convolve against Seagate Technology has taken an unexpected turn after a whistle-blower claimed that Seagate had appropriated Convolve technology and later destroyed evidence in the case.

The whistle-blower, a former Seagate employee named Paul A. Galloway, has provided what is described as “an eyewitness account” accusing Seagate of taking hard-drive technology from Convolve and incorporating it into its own products, according to documents filed recently with a federal court in Manhattan.

The court filings include claims by Galloway that Seagate, the world’s largest producer of computer hard drives, tampered with evidence tied to Convolve’s nearly 10-year-old patent infringement case against the company.

The allegations are detailed in an affidavit filed by one of Convolve’s lawyers as part of an effort to reopen the voluminous court record to include testimony from Galloway.

A conference on the case has been scheduled for Jan. 20 by Magistrate Judge James C. Francis IV of the U.S. District Court for the Southern District of New York, but it is not clear whether Convolve’s motion will be considered at that session.

The patent infringement case between Convolve and Seagate dates to 2000, when Convolve and the Massachusetts Institute of Technology sued Seagate and Compaq Computer seeking $800 million over technology that reduced the noise and vibration generated by hard-disk drives, the devices often used to store information in personal computers and computer servers.

Researchers at MIT had developed techniques for reducing the noise of a hard drive without significantly impairing its performance. Convolve was formed to help market and sell this and other related technology.

According to court and regulatory filings, representatives from Convolve and Seagate met in 1998 and 1999 to discuss some of Convolve’s work, subject to an agreement that Seagate would not make improper use of what it learned in those discussions.

In 2000, Convolve sued Seagate and one of its customers, Compaq, claiming that the “sound barrier” technology that Seagate introduced in 2000 relied on Convolve’s sound reduction innovations.

In the nine years since then, Convolve and Seagate have exchanged hundreds of documents under court-ordered discovery and filed myriad legal motions against each other. The case had the complex record of any drawn-out corporate skirmish – until the affidavit detailing Galloway’s allegations was quietly filed early this month.

On Dec. 2, the court docket showed an affidavit by Debra Brown Steinberg, one of the lawyers at Cadwalader, Wickersham & Taft representing MIT and Convolve, asking the magistrate handling the case to allow the introduction of Galloway’s testimony.

In her motion, Steinberg declared that Galloway was an engineer at Seagate until July 2009, and that he had contacted Convolve’s lawyers after he left Seagate to discuss the continuing court battle. Galloway then agreed to submit a sworn affidavit, which was not available in the public record.

Steinberg said Galloway had disclosed that Seagate’s engineers began to zero in on improving the company’s sound reduction features only after the company had seen Convolve’s technology. The company engineers, however, were not informed that Seagate had a nondisclosure agreement with Convolve that should have protected the technology, according to the affidavit.

“I was deceived by my management’s failure to tell me that the Convolve technology discussed within Seagate was NDA protected,” stated Galloway, referring to the nondisclosure agreement, in a section of the affidavit reproduced by Steinberg. “If I had known about Convolve’s NDA with Seagate, I would not have worked on competing technology.”

According to the filings, Galloway went on to say it appeared that Seagate had intentionally destroyed some of the software blueprints linked to products using the sound reduction technology.

Galloway claimed that the use of Convolve’s technology had been discussed extensively by Seagate’s engineers during meetings and that records of those meetings should be available. Galloway also said that Seagate had removed the computer on which his own notes about the technology were stored.

Woody Monroy, a Seagate spokesman, declined to comment on the matter. A spokeswoman for Hewlett-Packard, which now owns Compaq, declined to comment as well, but in the company’s public filings it has disclosed that Seagate was taking the lead in the litigation and had promised to indemnify Hewlett-Packard for certain claims included in the lawsuit, if necessary.

Galloway’s lawyer did not respond to a request for comment.

According to court documents, Galloway previously was a witness for Seagate in the protracted litigation.

Convolve has also sued Dell, Hitachi and Western Digital in regard to similar technology. That case is pending in a U.S. District Court in Marshall, Texas.