Lumileds LLC v. Elec-Tech International Co. Ltd.

Trade secret misappropriation

Santa Clara County

Superior Court Judge Brian C. Walsh

Plaintiff's lawyers: Reed Smith LLP, Brian D. Roche, Steven A. Miller, Jennifer Y. DePriest, William R. Overend, Maytak Chin

Defense lawyers: Jeffer Mangels Butler & Mitchell LLP, Stanley M. Gibson, Jessica Newman

A Santa Clara County jury awarded $66 million to a San Jose LED manufacturer in a rare trades secrets trial focused on allegations that a Chinese firm poached a key scientist to duplicate sensitive technology.

Said Brian D. Roche, the Reed Smith LLP partner who represented plaintiff Lumileds LLC: "My client is a distinguished international leader in LED technology. The defendant is an upstart maker of small kitchen appliances with no expertise in the LED field but with capital to invest."

Lumileds claimed that defendant Elec-Tech International Co. Ltd. and its corporate leadership lured Gangyi Chen--a Lumileds scientist with inside knowledge of the company's manufacturing designs--to steal the plans and bring them to China.

"Our challenge was to explain to jurors this extremely complex technology and how what he took was the crown jewel of LED chip-making," Roche said. "We had to show that this is a different kind of thing than what you can buy at Home Depot."

William R. Overend

The damages award represents the amount Lumileds spent on research and development that the jury concluded the defendant saved by using its rival's trade secrets.

Following the big jury award came a bench trial that led to a worldwide permanent injunction against Elec-Tech issued by Santa Clara County Superior Court Judge Brian C. Walsh. Lumileds LLC v. Elec-Tech International Co. Ltd., 2015-1-cv-278566 (S. Clara Super. Ct., filed March 24, 2015).

"The defense claimed these weren't real trade secrets," Roche said. "They put on a strong technical case, but the jury included some with science degrees. They deliberated for 11 hours--and that's a long time when you're waiting."

Elec-Tech responded in a statement that it is blameless. "We are obviously disappointed by today's outcome, but as we asserted during the trial Elec-Tech independently developed its own process for LEDs and never took, nor used any of Lumileds' technology."

Stanley M. Gibson, a Jeffer Mangels Butler & Mitchell LLP partner, represented Elec-Tech. He's appealing the outcome. "They were asking for $240 million and punitive damages," he said of the plaintiffs. "The jury didn't go with the high-end number or find malice that would have led to punitives. We contended there were no trade secrets here. We expect our appeal will be successful."

--John Roemer