Mosaic Semiconductor Inc. et al., v. Austin Semiconductor et al.
Published: May 27, 2000 | Result Date: Mar. 2, 2000 | Filing Date: Jan. 1, 1900 |Case number: EC023859 Verdict – $2,400,000
Judge
Court
L.A. Superior Glendale
Attorneys
Plaintiff
Defendant
Philip J. Eskenazi
(Hunton, Andrews & Kurth LLP)
Experts
Plaintiff
Robert Knudsen
(technical)
Defendant
Arthur Andersen
(technical)
Brian K. Evans
(technical)
Facts
In 1997, plaintiff Mosaic and its parent company, plaintiff Hybrid Memory Products desired to sell their
military and industrial memory module businesses. Defendant Austin, a wholly-owned subsidiary of defendant
PMC, Inc., expressed an interest in purchasing these businesses and signed a confidentiality agreement with
Hybrid.
The confidentiality agreement included terms requiring defendant to limit its use of allegedly confidential
business information it received from the plaintiffs to evaluating the proposed acquisition of the memory
module business. The defendant conducted due diligence concerning the proposed acquisition.
During this due diligence stage, the plaintiffs disclosed a great deal of confidential business information
regarding the memory module businesses, including but not limited to customer lists, customer requirements,
pricing and costing information. Included in these disclosures was historical and projected information
regarding the sale of memory modules to a secret military program at Raytheon Texas Instruments.
On Nov. 25, 1997, the defendants terminated the acquisition talks. In early December, defendant Austin
announced it had won, over plaintiff and two other bidders, a contract to supply Raytheon with memory
modules. The contract was worth $3 million.
The plaintiffs brought suit against both defendants for misappropriation of trade secrets, fraud by intentional
misrepresentation, concealment, and also breach of confidentiality (against Austin.) The plaintiffs sought both
compensatory and punitive damages.
Settlement Discussions
The plaintiff demanded $36 million, which was reduced to $6 million at trial. The defendants made no offer.
Damages
The plaintiffs alleged over $7 million in total compensatory damages.
Other Information
The court awarded Hybrid an additional $1,231,148 in attorney fees under the terms in the confidentiality agreement. The court also awarded Hybrid $34,195 in statutory costs. <P>DefendantÆs motion for judgment notwithstanding the verdict was denied. Defendants have appealed.</P>
Deliberation
three days
Length
21 days
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