TSMC Wins Lawsuit against Ex-employee Who Joined Rival Samsung

18 May

Taiwanese semiconductor giant Taiwan Semiconductor Manufacturing Co. (TSMC) and South Korea’s Samsung Electronics have been in heated competition with Samsung joining the foundry business and shifting orders from TSMC. Samsung has also been actively luring key talent away from TSMC. The South Korean conglomerate successfully headhunted Liang Mong-song, a former senior director of R&D at TSMC, with a lucrative offer. After leaving TSMC, Liang taught in a local university before taking the job as an R&D vice president at Samsung in South Korea.

TSMC said on May 14 that the company won the infringement case against Liang in the second trial at Taiwan’s Intellectual Property Court and the court had also agreed to TSMC’s three requests, including to ban Liang from leaking TSMC’s classified information and from working for Samsung until the end of 2015.

The rulings have set a precedent and hence the defendant has little chance to win an appeal.

According to TSMC, Liang can still appeal the case but the previous rulings have set a precedent and he would have little chance to overturn the situation. TSMC said the ruling will pose legal restrictions on Liang and prohibit him from providing any services for Samsung.

TSMC said it hopes the ruling will have an immediate effect and warn Samsung against improperly soliciting its employees as well as urge foreign companies to refrain from poaching staff from their Taiwanese counterparts.

The first trial verdict and TSMC’s requests

In the litigation in 2013 between TSMC and Liang in alleged trade secrets infringement, the Intellectual Property Court ruled in TSMC’s favor and ordered Liang not to utilize or leak any classified information or trade secrets involving TSMC’s products, manufacturing, clients or suppliers that Liang had known of or had access to during his employment with TSMC. In addition, the court also stipulated that Liang may not obtain trade secrets from third parties including TSMC employees, suppliers and clients in any improper way and may not utilize or leak information concerning TSMC’s R&D personnel to Samsung. All of the abovementioned limitations are quite strict.

However, one of the requests by TSMC was rejected in the first trial, in which the Taiwanese company asked that Liang be banned from providing services for Samsung in any form, including employment, until Dec. 31, 2015. This request was granted in the second trial.

Striking a balance between personal career plan and infringement avoidance

With regards to its employees’ personal career plan, TSMC reiterated that the company respects its employees’ right to pursue personal goals and accomplishment but will not allow any actions that infringe TSMC’s intellectual property rights. How to keep key talent and protect a company’s intellectual property rights and business secrets is a topic of legal issue and professional ethics that is worth discussing for businesses and employees.