Hitachi launches suit on patent infringement
By Li Weitao (China Daily)
Updated: 2004-12-31 08:42

The world's No 2 hard disk drive maker Hitachi Global Storage Technologies (Hitachi GST) has brought a Chinese rival into a US court for alleged patent infringements.

The case has added to an increasing number of IPR (intellectual property rights) disputes between established global technology giants and rapidly-growing Chinese technology firms.

Hitachi GST, a joint venture between Hitachi and IBM, filed the lawsuit in the United States District Court for the Northern District of California.

In a statement, Hitachi GST said it seeks undisclosed monetary damages from GS Magicstor Inc, its parent company GS Magic Inc, and a research affiliate in California.

It also asks the US court to impose a permanent injunction prohibiting GS Magic from making and selling the allegedly infringing products in the United States.

GS Magic, based in Guiyang, capital of Southwest China's Guizhou Province, is a Sino-US joint venture with US-based Riospring Inc owning a 25 per cent stake.

The case follows two similar lawsuits filed by hard disk drive makers Seagate Technology and Western Digital against US firm Cornice, a new market entrant, for alleged patent infringements.

GS Magic and Cornice are Hitachi GST's two major rivals in the market for the 1-inch mini hard disk drive market.

GS Magic, in a statement released yesterday, denied the allegations, saying it has been in talks with Hitachi GST over the IPR issue for half a year while Hitachi GST, before the suit, had agreed to hold further talks in Japan in January.

GS Magic said Hitachi GST, which is not sincere in the talks, is using the lawsuit to harm GS Magic's business.

All the patents Hitachi GST accused GS Magic of alleged infringement were proposed more than 10 years ago and are "quite disputable," GS Magic said.

Hitachi GST has warned GS Magic against attending the International Consumer Electronics Show (CES) in the United States from January 6 to 9 next year, the statement said.

The annual CES is the largest expo in the global consumer electronics industry.

GS Magic said it has entrusted lawyers to respond to the lawsuit.

GS Magic launched its first 1-inch drive in September 2003, and first 1.8-inch drive in May, 2004, claiming it has fully-owned IPRs.

It has posed a severe threat to Hitachi GST. GS Magic was the No 1 maker of 1-inch hard disk drives in the world in the fourth quarter of 2003.

According to a notice from Shenzhen-listed South Huitong Co Ltd which has a 36.4 per cent stake in GS Magic, GS Magic signed 10 contracts worth US$356.85 million at the Shenzhen High-Tech Fair in October for providing 1-inch and 1.8-inch hard disk drives to nine customers.

Hitachi GST's lawsuit against GS Magic confirms a trend that established overseas tech giants are filing IPR infringement lawsuits in the United States to slow down aggressive overseas expansion of rivals in the Chinese mainland.

The world's networking king Cisco Systems filed a lawsuit in the United States in January, 2003 against China's top telecoms gear maker Huawei Technologies for alleged IPR infringement.

In July this year, Cisco dropped the suit in exchange for Huawei modifying its network router and switch product line-up.

Huawei's overseas business has grown rapidly in recent years. Its sales this year generated from overseas markets already exceed US$2 billion.

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