SAN JOSE, Calif. -- China's Advanced Micro-Fabrication Equipment Inc. (AMEC) has obtained a ruling on a summary judgment motion it filed in its trade secret dispute with rival Applied Materials Inc.
The decision, a victory for AMEC, ''eliminates one of the plaintiff's arguments in the broader action,'' according to fab tool vendor AMEC (Shanghai).
Applied's suit, filed in the U.S. District Court in the Northern District of California in 2007, claimed that AMEC is allegedly involved in misappropriation of trade secrets, breach of contract and unfair competition.
The co-defendants in the suit include several AMEC executives, who were former employees at Applied Materials.
Founded in 2004, AMEC has entered the etch and chemical vapor deposition (CVD) markets, thereby putting itself in direct competition with Applied, Lam, TEL and others.
''Specifically, Applied Materials claimed that AMEC patent applications filed by former Applied Materials employees relating to their previous work at Applied Materials should be assigned to Applied Materials because of a provision in the former employees' employment contracts,'' according to AMEC.
U.S. District Judge James Ware disagreed with Applied Materials, ruling ''that the clause restricts employee mobility which violates California's public policy and is therefore invalid and unenforceable,'' according to AMEC.
The ruling represents an ''interim win'' for AMEC, but it does not resolve the case entirely in AMEC's favor. The case is scheduled for trial in October.
In a statement, AMEC chief executive, Gerald Yin, said: "We are delighted with the ruling and very pleased that it upholds the fundamental right and freedom of former employees to continue innovating and building strong technology companies. We're gratified that the attempt to restrict those innovators' rights has failed on this occasion."
AMEC was represented in the action by a team led by Harold McElhinny, a partner with Morrison & Foerster.
"Applied Materials is determined to do everything in its power to eliminate open competition in its markets. With this ruling, the Court has rejected one of the substantial barriers Applied tried to place in the path of employees seeking better jobs elsewhere. We hope that, as additional rulings occur in this litigation, other barriers will meet a similar fate,'' McElhinny said.