Western Digital Ordered to Pay $525 Million To Seagate

A drop in the bucket Western Digital plans to fight on principle, if one can call it that.

The battle between hard driver makers Seagate and Western Digital over misappropriated company secrets has ended somewhat inconclusively on Friday, with arbiters ordering Western Digital to pay 525 million dollars to Seagate. The decision is the capstone to a rough year for Western Digital that included massive flooding in Thailand, where the company produces 60 percent of its drives. WD is thus far refusing to comply with the order, vowing instead to fight the decision in court.

"We do not believe there is any basis in law or fact for the damage award of the arbitrator. We believe the company acted properly at all times," president and CEO John Coyne said in a statement issued to the media, "and we will vigorously challenge the award."

The fight started in 2006, when Seagate moved to sue after a former employee hired by Western Digital allegedly shared "confidential information and trade secrets". The court case was postponed in 2007 when the two parties chose to enter arbitration. With Friday's decision, and Western Digital's vow to fight it, the battle that has already lasted five years is likely to intensify. Though the decision appears to be a stunning loss, Western Digital reported Q3 2011 earnings of nearly 4 billion dollars; their planned 4.3 billion dollar acquisition of Hitachi GST will go forward as planned. Western Digital and Seagate dominate the hard drive market, controlling a respective 32 percent and 31 percent.