14 August 2018

Lumileds awarded $66m damages in IP theft lawsuit against ETI

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On 10 August, a jury of six men and six women rendered a verdict in favor of LED maker Lumileds LLC of San Jose, CA, USA, finding that a Chinese competitor stole trade secrets related to Lumileds core technology for making high-power LEDs used in flash phones, automotive headlights and general illumination.

The case - Lumileds LLC versus Elec-Tech International Co Ltd (ETI), Donglei ‘Tony’ Wang and Gangyi Chen - in the Superior Court of the State of California, County of Santa Clara, found the defendants liable for damages in intellectual property theft. The jury awarded Lumileds $66m.

The jury concluded that ETI, Wang and Chen misappropriated Lumileds trade secrets, took them to China, and used them to develop ETI’s LED technology. The award of $66m is the amount of R&D costs that the jury concluded ETI saved by using Lumileds trade secrets rather than engaging in its own development.

“At Lumileds, we invest heavily in innovation,” says Lumileds’ CEO Mark Adams. “We will continue to work with the judiciary, law enforcement and appropriate government agencies to defend and protect our valuable intellectual property rights.”

Lumileds says that the circumstances of the trade secret theft involved Wang (ETI’s CEO) and Chen (a former scientist employed by Lumileds). Wang authorized a substantial payment to be made to Chen four months before he left Lumileds to go to work for ETI in China, effectively putting him on the payroll of ETI while he was working daily with Lumileds’ most confidential trade secret technology.

Lumileds was represented in the matter by senior VP, general counsel, Cheree McAlpine and outside lead counsel Brian Roche, a partner at Reed Smith LLP.

“The precedent set by today’s verdict sends a clear message to the industry that intellectual property will be guarded and enforced to safeguard the health of our business,” says McAlpine.

See related items:

Lumileds appoints Cheree McAlpine as senior VP & general counsel

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