Taiwan Today

Taiwan Semiconductor Manufacturing Co. Ltd. has won a jury victory over mainland China’s Semiconductor Manufacturing International Corp. in a long-running trade-secrets feud between the two foundries. An Alameda County Superior Court jury in the U.S. state of California ruled Nov. 3 in favor of TSMC, which had filed a suit claiming SMIC was continuing to misappropriate its trade secrets in violation of an agreement reached between the two sides four years earlier. TSMC is seeking some US$1 billion in compensation for damages and requesting that the court issue an injunction when the trial concludes that would prevent SMIC from continuing to sell in the United States wafers using the technology at issue in the case. The 2005 agreement settled an earlier suit filed by TSMC against the mainland Chinese chip maker, alleging patent infringement. Under that settlement, SMIC agreed to pay TSMC US$175 million over a five-year period, and the two sides cut a deal to cross-license their patents for six years. However, TSMC filed the latest suit for breach of that deal at the state court in Alameda County in August 2006. The Taiwan foundry welcomed the jury’s verdict Nov.4, reiterating its stance on the importance of intellectual property rights protection and fair competition. Meanwhile, SMIC expressed regret and disappointment with the ruling, saying that its support for IPR protection has not changed. The company added that it does not rule out the possibility of appealing the decision in order to protect the rights and interests of its shareholders. The jury is expected to come to a decision on the amount in damages that should be paid sometime next week after hearing testimony and evidence from both sides. The state superior court will then make a ruling on TSMC’s injunction request at some point thereafter. (SB)