US Court upholds damages award in TEL piracy lawsuit

December 8, 2004–Tokyo Electron (TEL) announced Tuesday that Tokyo Electron Arizona (TAZ) has secured a permanent injunction in the US District Court for the Eastern District of New York against Discreet Industries Corp., and its president, Ovadia Meron, barring Discreet and Meron from using TAZ’s trade secrets or the technical drawings Discreet illegally copied from TAZ’s drawings for all of the 266 replacement parts at issue in the case.

The injunction covers all persons associated with Meron and Discreet in their unlawful conduct, including the various shell corporations Meron used to conceal his activities. In addition, Meron and Discreet were ordered to surrender any and all of TAZ and Metron Technology’s technical drawings they possess. Metron purchased the Eclipse product line from TAZ in 2003.

Discreet had asked the Court to throw out the jury’s verdict or otherwise reduce the damages award. The Court rejected that motion, upholding the jury’s verdict of $9,900,000 in compensatory and punitive damages against Meron and Discreet in every respect, and is also allowing TAZ to recover its legal fees in prosecuting the action against Discreet and Meron.

The jury rendered its verdict on April 1, 2004, awarding TAZ $6,300,000 in compensatory damages and $3,600,000 against Discreet and Meron personally for what the Court determined was “egregious conduct
involving protracted trickery and deceit.”

“TEL is very pleased that the Court has agreed that this was an outrageous act of piracy by upholding the jury award and granting a permanent injunction against this piracy. TEL is actively pursuing pirates worldwide in a campaign to stop the pirating of our intellectual property, including recent successes against pirates through the Korean judicial system. TEL will continue to identify and prosecute companies pirating our parts and equipment to prevent the loss of any value of our intellectual property and any potential quality and safety hazards caused by non-qualified parts,” said Zoltan Papp, TEL VP, global legal & intellectual property.

Tokyo Electron filed the suit in May 2001, claiming that Discreet pirated designs of 266 aluminum and quartz parts for its Eclipse sputtering equipment, which deposits thin metal films on silicon wafers, and that it sold the products to major US chipmakers at discount prices. Tokyo Electron demanded that such sales be suspended.

In June, Tokyo Electron settled a pirating case with a South Korean firm by receiving compensation.


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