|[December 17, 2013]
VIA Sues Asus Group Companies and Executives for Damages of NT$4.137 billion in Trade Secrets Misappropriation Suit
TAIPEI, Taiwan --(Business Wire)--
Following the decision by the Taiwan Prosecutor to pursue criminal
proceedings against a subsidiary of Asustek Computer, Inc. (TSE: 2357)
and four of that subsidiary's employees for the alleged misappropriation
of trade secrets from VIA (News - Alert) Technologies, Inc. (TSE: 2388), VIA today
announced that it has filed a civil suit in the Taipei District Court
seeking damages of at least NT$4.137 billion (US$138 million) from
Asustek Computer, Inc and its subsidiary Asmedia Technology.
The lawsuit is being filed to recover the losses incurred as a result of
the alleged misappropriation of VIA intellectual property related to USB
technology. Also named in the suit are Asmedia Chairman Jerry Shen,
Asmedia President Lin Chewei, and other Asmedia employees involved in
"As a long-time leader in IC design and technology innovation, VIA
strongly believes in the importance of protecting intellectual property
rights," commented Wenchi Chen, CEO of VIA Technologies, Inc. "In
addition to protecting interests of VIA and our shareholders, the aim of
this suit is to ensure our industry operates in a healthy market
environment that fosters innovation and promotes fair competition."
On 8 November 2013, the Taiwan Prosecutor decided to pursue criminal
proceedings against Asmedia and four employees, including Chang Chi, VP
of R&D, after the conclusion of its investigation into the alleged
misappropriation of VIA's trade secrets, as well as violation of
Copyright Act. In addition to seeking damages, VIA is also requesting
the court to instruct Asmedia to cease the roduction and sales of the
allegedly infringing products.
Taiwan amended its Trade Secret Act earlier this year to enhance its IP
protection laws. One key reform included increasing the penalties for
intellectual property crimes, so anyone who misappropriates trade
secrets in Taiwan with the intent to use them overseas may be imprisoned
for up to 10 years and fined up to US$1.7 million, or possibly more if
there are substantial illicit gains.
The lawsuit alleges that a former VIA executive, Chewei Lin, left VIA in
2007 and joined Asmedia (controlled by Asus Group), taking dozens of VIA
employees with him, and also VIA's intellectual property related to USB
technology, including host controllers and device controllers. Those
products are used in many computing and consumer electronics products,
including PCs, external Hard Disk Drives, and peripheral devices.
Asustek Computer, Inc. is the largest single purchaser of Asmedia USB
Prior to that, Asmedia had no expertise in the USB field, according to
the lawsuit. Given the complexity and legacy USB 1.0, 1.1, and 2.0 IP
required for the development of USB 3.0 chips, the Taiwan Prosecutor
concluded in the criminal case filing that "it is extremely difficult to
develop and take such chips into mass production in such a short time
frame [of one year]."
According to the results of investigation carried out by the Taipei
District Prosecutor, the evidence of trade secret theft is strong enough
to justify the criminal prosecution of Asmedia and four Asmedia
employees, including R&D VP Chang Chi.
The total Asus Group stake in Asmedia is 56.23%. Asustek Computer, Inc
is Asmedia's single largest shareholder with a stake of 43.89% and two
other subsidiaries hold the remainder. Asustek Computer, Inc is the
largest single customer of Asmedia. Asmedia Chairman Jerry Shen is also
the General Manager of the Asus motherboard business unit.
About VIA Technologies, Inc.
VIA Technologies, Inc is the foremost fabless supplier of power
efficient x86 processor platforms that are driving system innovation in
the PC, client, ultra mobile and embedded markets. Combining
energy-saving processors with digital media chipsets and advanced
connectivity, multimedia and networking silicon enables a broad spectrum
of computing and communication platforms, including its widely acclaimed
ultra compact mainboards. Headquartered in Taipei, Taiwan, VIA's global
network links the high tech centers of the US, Europe and Asia, and its
customer base includes the world's top OEMs and system integrators. www.via.com.tw
Note to reporters, editors and writers: VIA is written in ALL CAPS.
The names of actual companies and products mentioned herein may be
the trademarks of their respective owners.
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