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Texas Jury Returns $58.7 Million Trade Secret, Exemplary Damages Verdict for TAOS Inc.

Posted on March 7, 2015

Munck Wilson Mandala secures win against Intersil Corp. on behalf of TAOS

PLANO, Texas – The Dallas technology-focused law firm Munck Wilson Mandala is announcing a $58.7 million trade secret misappropriation, breach of contract, patent infringement and tortious interference verdict for firm client Texas Advanced Optoelectronic Solutions Inc. (TAOS) in the U.S. District Court for the Eastern District of Texas.

Following the four-week trial, federal jurors on Friday found that Milpitas, Calif.-based Intersil Corp. (Nasdaq: ISIL) used TAOS’ patented technology for dual-diode ambient light sensors without consent. The jury also found that Intersil misappropriated TAOS’ trade secrets in order to obtain a competitive advantage. TAOS prevailed in all the company’s claims against Intersil, including misappropriation of trade secrets, breach of contract, tortious interference and patent infringement. The verdict includes $48.7 million in damages for trade secret misappropriation and $10 million in punitive damages for both trade secret misappropriation and for tortious interference.

The case is Texas Advanced Optoelectronic Solutions Inc. v Intersil Corp., No. 4:08-CV-451.

In 2002, TAOS patented its dual-diode ambient light sensor technology, which allows flat panel video displays to adjust brightness based on surrounding ambient light levels. The technology allows electronic devices to extend battery life and provide optimum viewing in diverse lighting conditions. The patent is U.S. Patent No. 6,596,981.

Intersil sought to purchase TAOS in 2004 as a way to quickly enter the light-sensor market, according to trial testimony. Jurors heard how the two companies executed non-disclosure agreements in advance of a potential merger or acquisition, and how TAOS officials shared details about the technology and competitive trade secrets, including vendor information and proprietary pricing details. According to the lawsuit, Intersil did not make a reasonable offer to acquire TAOS, and the two companies parted ways.

“Intersil had the opportunity and ability to buy TAOS but instead chose to embark on a course of conduct that involved lying, cheating and stealing,” said the company’s lead trial attorney Jamil Alibhai in closing arguments.

Less than a year after the acquisition talks ended, Intersil introduced a competing light-sensor product by using the same technology learned from TAOS. The jury also heard how Intersil used TAOS’ confidential pricing information to undercut TAOS and win supply contracts for the second-generation iPhone 3G and iPod Touch.

“This verdict is the result of a team effort over seven years of litigation, and it really demonstrates our firm’s technical expertise and complex litigation skills,” says Munck Wilson Mandala trial team lawyer Michael McCabe. “We’re proud to be able to represent technology clients like TAOS Inc. by helping protect their innovations.”

In addition to Mr. Alibhai and Mr. McCabe, the Munck Wilson Mandala team included fellow firm attorneys Michael Wilson, Kelly Chen, Robert McCutcheon, Jessica Spaniol and Jordan Strauss.

Munck Wilson Mandala is a technology-focused law firm with offices in Dallas and Marshall, Texas, with an emphasis on patent, trade secret and other intellectual property disputes. The firm offers full-service counsel in the areas of intellectual property litigation, complex commercial litigation, intellectual property portfolio development, corporate transactions and securities, and employment law. Munck Wilson Mandala represents clients from start-ups to Fortune 50 companies. Learn more about the firm at https://www.munckwilson.com.

For more information on the verdict, please contact Robert Tharp at 214-458-4007 or robert@androvett.com.

 

MEDIA CONTACT:

Shannon Tipton, 972-628-4500

stipton@munckwilson.com