ASML wins punitive damages in Chinese IP theft case

May 06, 2019 //By Peter Clarke
ASML wins punitive damages in Chinese IP theft case
ASML Holding NV, the leading supplier of semiconductor lithography equipment, has been awarded $845 million in damages against XTAL Inc., a company founded by two former ASML employees.

However, the sum of money is not collectable because XTAL is bankrupt and instead ASML is set to take possession of most, if not all, of XTAL's own IP.

This would appear to represent the end of a tale dating back to 2014 when former ASML employees set up their company under a Chinese parent company called Dongfang Jingyuan Electronics Ltd. and then induced former colleagues to provide details of computational lithography software processes used by ASML.

The target of the theft, which took place in 2015, was an ASML software subsidiary called Brion in California. According to reports six former ASML employees, all with Chinese names, breached their employment contract by taking information on ASML software to XTAL Inc.

In November 2018, the court found in favour of ASML and awarded $223 million in damages and XTAL filed for bankruptcy a month later.

On May 4, the Santa Clara County Superior Court entered its final judgment in favor of ASML against XTAL Inc. and awarded ASML the amount of $845 million as well as an injunction.

In addition to the $845 million judgment, the trial court issued an injunction. The injunction orders XTAL not to conduct any software development activities on its software products that ASML alleged are contaminated with ASML’s IP, grants ASML explicit permission to reach out to actual or potential customers of XTAL and inform them of the jury’s verdict and result of the lawsuit, and bars XTAL from continued work in the same field of business as Brion for a certain period of time.

Related links and articles:

www.asml.com

News articles:

They were thieves not spies, says ASML

ASML was hit by Chinese espionage

Book review: ASML's Architects

ASML, IMEC to take EUV lithography to high-NA

ASML warns of product delivery delays after fire at supplier


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