Facts

Netlist Inc. sued Diablo Technologies Inc., a silicon chip-set designer and manufacturer, in a dispute between former business partners.

PLAINTIFF'S CONTENTIONS:
Plaintiff allegedly entered into a development contract with defendant to produce chips for use in servers and in computers. Defendant allegedly reneged on the agreement and launched its own line of chips. Plaintiff alleged that Hyun Lee, its chief technical officer, was an inventor in defendant's patent and sought addition of his name as an inventor for the subject patent.

Plaintiff asserted claims for correction of inventorship and ownership, breach of contract (non-disclosure agreement), breach of development and supply agreement, multiple violations of the Lanham Act, misappropriation of trade secrets, and unfair competition.

DEFENDANT'S CONTENTIONS:
Defendant disputed plaintiff's claims and denied that it breached either contract. Additionally, defendant claimed that plaintiff's misappropriation claim failed because it did not state which trade secrets were allegedly misappropriated. Moreover, defendant contended that none of the alleged trade secrets were trade secrets in the first place and that defendant's chips did not incorporate any alleged trade secrets. With respect to its claim for unfair competition, defendant contended, among others, that that claim was preempted by the California Uniform Trade Secrets Act.

Injuries

Netlist sought $6.5 million in damages and a permanent injunction.

Result

The jury found in favor of Diablo with respect to Netlist's breach of contracts, misappropriation of trade secrets, and correction of inventorship claims. Next, it found in Netlist's favor on its claims for trademark infringement and false and misleading advertising. It then awarded Netlist $1.00 in nominal damages as to both winning claims.

Other Information

FILING DATE: Dec. 26, 2013.