On June 30, 2023, JT&N’s senior partners, Decheng LI, and Wei LIU, signed the Higher People’s Court of Shanghai Municipality (2017) HMZ No. 169 judgment. The final judgment confirmed the fact that Lam Research Corporation (美国科林研发股份公司) had illegally obtained the technical secrets of the etching machine of Advanced Micro-Fabrication Equipment Inc. China (中微半导体设备公司), and ordered Lam Research Corporation to immediately destroy the technical information of the plasma etching machine and the photos of the plasma sealing ring in its possession, and to refrain from disclosing, using, or permitting others to use them. The judgment also ordered Lam Research Corporation to pay damages of CNY 1 million and attorneys’ fees and reasonable expenses of CNY 900,000.
It has been 13 years since JT&N began representing the case in the Shanghai First Intermediate People’s Court in 2010 until the final judgment was rendered. This case has become another classic case involving technical secrets, which should be congratulated!
Typical Significance
I. The technical secrets of Advanced Micro-Fabrication Equipment Inc. China obtained by Lam Research Corp. through improper means and the preservation of evidence in the courts of Taiwan Province should be destroyed and shall not be disclosed, used, or allowed to be used by others.
In this case, Lam Research Corporation submitted the statements of several witnesses in the courts of Taiwan Province to prove that the photos of the plasma seal ring involved in the case were obtained from Winbond (华邦公司). However, the court held that the witnesses were employees of Lam Research Corporation and had an interest in Lam Research Corporation, and the relevant witnesses also did not testify in the case, so the existing evidence was not sufficient to prove the legality of Lam Research Corporation’s possession of the above photos. Therefore, it should be determined that the above photos were obtained through improper means; The court ruled that Lam Research Corporation had illegally obtained the technical secrets contained in the plaintiff’s training materials and the plasma sealing ring photos, and that Lam Research Corporation and its employees ZHANG and LAI (foreigner) had also illegally obtained the technical secrets of Advanced Micro-Fabrication Equipment Inc. China in the process of evidence preservation in the courts of Taiwan Province. Therefore, they are civilly liable for not disclosing, using, or allowing others to use such technical secrets before they become public knowledge.
II. Advanced Micro-Fabrication Equipment Inc. China should be compensated for the loss of the relevant competitive advantage resulting from Lam Research Corporation’s possession of its technical secrets and for all damages caused thereby. This case has been a test case for the principle that “there should be compensation for knowable damage”.
According to the investigation of the Higher People’s Court of Shanghai Municipality, there are only about 10 etching machine manufacturers in the world, because it is a high technical threshold industry with insufficient competition, and technological innovation is of great importance to the industry. Therefore, understanding and even mastering the technical solutions of major competitors can enable etching machine manufacturers to gain competitive advantages in terms of technology or market competition. For this reason, Advanced Micro-Fabrication Equipment Inc. China and Lam Research Corporation sign non-disclosure agreements or confidentiality clauses with customers on relevant technical information when supplying etching machine products to their customers. Advanced Micro-Fabrication Equipment Inc. China and Lam Research Corporation have common customers for etching machine products, so they are direct competitors. Although there was no evidence, in this case, to prove that Lam Research Corporation had used the technical secrets of Advanced Micro-Fabrication Equipment Inc. China in its production and business activities, and there was insufficient evidence to prove that Lam Research Corporation had used technical secrets of Advanced Micro-Fabrication Equipment Inc. China for reference in its product research and development, Lam Research Corporation had illegally obtained the technical secrets of Advanced Micro-Fabrication Equipment Inc. China. In addition, Lam Research Corporation will gain technical or market competitive advantages and eventually benefit from mastering the technical secrets of its direct competitors, and because Lam Research Corporation has mastered its technical secrets, Advanced Micro-Fabrication Equipment Inc. China will also lose its competitive advantage and eventually suffer losses. Therefore, the claims of Advanced Micro-Fabrication Equipment Inc. China for damages from Lam Research Corporation should be upheld.
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