Taiwan Semiconductor loses trade secrets case

Taiwan Semiconductor Manufacturing Co (TSMC) has lost a US court case in which it was accused of leaking confidential chip design information from one of its customers.

The world's largest contract chip maker immediately announced that it will appeal against the jury verdict, in which it was ordered to pay $30.5m to US-based UniRAM Technology.

TSMC makes chips for hundreds of firms that do not have their own manufacturing facilities, including industry leaders Nvidia and ATI.

Many of its customers compete with each other, so TSMC promises to keep chip designs confidential even though they may all be rolling off the same production lines.

UniRAM's legal representatives had alleged that TSMC had "misappropriated" trade secrets relating to the design of embedded DRam chips.

Publicly available documents from the companies do not state clearly whether UniRAM is claiming that TSMC deliberately leaked the information.

UniRAM has already received a $2.4m settlement from competing memory design firm MoSys Inc. Both companies have been TSMC customers in the past.

UniRAM had alleged that the trade secrets it provided to TSMC in 1996 and 1997 had somehow been leaked to MoSys. MoSys paid to settle the case without admitting to the charges.

"TSMC has always held itself to the highest standards of respect for intellectual property, and believes that this verdict is in error," said Dick Thurston, vice president and general counsel at the company. "We intend to pursue all defences vigorously."

The jury's verdict came after a two-week trial in the US District Court for the Northern District of California, San Francisco Division.