SAN FRANCISCO—Taiwan Semiconductor Manufacturing Co. (TSMC) has won a jury verdict over China's Semiconductor Manufacturing International Corp. (SMIC) in a long-running trade secrets dispute between the two foundries, according to an attorney involved in the case.
The California Superior Court jury ruled on Tuesday (Nov. 3) that SMIC has been misappropriating TSMC trade secrets since January 2005, after the firms reached an agreement to settle allegations of corporate espionage and intellectual-property infringement, according to the attorney.
"We are very pleased. They [the jurors] were asked 18 to decide issues and they decided all in our favor," said Jeffrey Chanin, a partner at the law firm Keker and Van Nest LLP, which represents TSMC.
Chanin said the trial is scheduled to continue for three more days, after which the jury is expected to decide damages. Chanin declined to speculate on the amount TSMC would be awarded, saying it was for the jury decide. But he added that SMIC has said publicly that the amount being sought is between $1 billion and $3 billion.
"We are talking about a potentially large amount," Chanin said. "For TSMC there is also a desire to have fair competition" and not have SMIC continue to use its trade secrets, he said. TSMC is asking the court to issue an injunction when the trial concludes that would prevent SMIC from continuing to sell in the U.S. wafers made using the technology at issue, Chanin said.
Chanin said the jury agreed with TSMC on 61 of the 65 instances that TSMC presented as evidence of the misappropriation of trade secrets.
TSMC filed suit against SMIC in California Superior Court in Oakland, Calif., in August 2006. The two companies in January 2005 settled another suit filed by TSMC in 2003 that claimed SMIC systematically pilfered TSMC trade secrets by hiring hundreds of its engineers and asking a few senior people to take information with them as they left.
SMIC promised in 2005 settlement it would purge itself of all TSMC's proprietary information. TSMC alleged that SMIC was still using some of its trade secrets in most of its legacy processes and that the Chinese foundry has also used TSMC technology as the baseline for 130- and 90-nm processes.
The TSMC-SMIC trial is being broadcast over the Internet by Courtroom View Network.
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