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Minidrive maker Cornice slapped with another suit

Start-up is victim of patent-infringement suit, as it looks to grab more of white-hot market for music-player drives.

Minidrive maker Cornice's problems got bigger Wednesday, with yet another lawsuit claiming it's infringing patents as it looks to grab more of the white-hot market for music-player drives.

Disk-drive maker Western Digital said it filed a suit charging start-up Cornice with infringing seven Western patents related to disk-drive technology. A week ago, another major disk-drive player, Seagate Technology, also announced a patent-infringement suit against Cornice.

Western Digital said it is seeking to "prevent Cornice from illegally using Western Digital patented technology, as well as seeking to recoup monetary damages resulting from patent infringement by products Cornice has already sold to its customers." A Cornice representative said on Wednesday that the company does not comment on pending litigation.

Longmont, Colo.-based Cornice is one of a handful of companies making drives one inch in diameter or smaller. Such drives are designed to be used in products such as music players and cameras. Tiny drives also are a fast-growing product category. According to research company TrendFocus, the market for such drives will expand from 923,000 units last year to about 3 million this year.

Cornice captured 28 percent of that market last year, according to TrendFocus. China-based GS Magicstor accounted for 30 percent, and Hitachi Global Storage Technologies, whose 1-inch drives are built into Apple Computer's iPod Mini, had 42 percent.

Seagate recently announced it would be shipping 1-inch drives later this year.

Western Digital has not focused up to now on smaller-size drives. But the company plans to begin selling 2.5-inch drives used in laptop computers by the end of the year. Typical desktop computer drives are 3.5 inches in diameter. As for 1-inch drives, a Western Digital representative said: "It's an area that we are watching very closely."

John Monroe, an analyst with researcher Gartner, suggested the stakes in the lawsuits are large, because the minidrive market is likely to explode further in the future. He predicts annual shipments of 18 million to 25 million drives that are smaller than 2.5 inches in the next five years. "Every teenager in the world is going to want a hard-drive enabled MP3 player," Monroe said.

Hard drive makers over the last decade have generally avoided lawsuits over intellectual property, Monroe said. But he said he was expecting Cornice to face a suit, given the vast amounts of money the traditional hard drive companies have poured into research and development. Cornice might be able to win the lawsuits, he said, but it "won't be easy" for the company to defend itself on two fronts.

Cornice was formed in August 2000 by Kevin Magenis, former vice president of engineering at Maxtor, and Curt Bruner, formerly the chief electronics architect at Quantum and Intersect. Magenis is Cornice's CEO, and Bruner is chief technical officer.

According to Cornice's Web site, "Magenis and Bruner assembled a team of world-class innovative engineers who had worked together at such HDD (hard disk drive) leaders as Maxtor, Quantum, Seagate and Connor Peripherals, and were frustrated by the HDD industry's resistance to disruptive ingenuity, and were eager to strike off in a new and exciting direction. Team members deliberately chose the consumer electronics industry to implement their vision because the (consumer electronics) industry, less hamstrung by legacy concepts, is more open to new ideas."

The Web site adds: "The core Cornice engineering team collectively holds well in excess of 100 patents and, with more than 500 years of collective experience, was responsible for the development and volume delivery of world-leading products from Maxtor, Quantum, Hewlett-Packard, Seagate, Western Digital and Conner Peripherals."