Texas Advanced Optoelectronic Solutions, Inc. v. Intersil Corporation
November 25, 2008
United States District Court for the Eastern District of Texas
On March 6, 2015, the jury awarded Texas Advanced Optoelectronic Solutions Inc. (TAOS) $58 million dollars for its trade secret misappropriation suit against Intersil after seven years of litigation in the Eastern District of Texas.
TAOS patented technology that empowers flat panel video displays to adjust brightness based on different light exposures. Intersil approached TAOS in 2004 to negotiate a potential merger to enter the light sensor market. During the course of negotiations, both parties signed confidentiality agreements to protect TAOS’ technology and competitive trade secrets – including vendor information.
Then after what TAOS characterized as an unreasonable offer, Intersil severed all ties with TAOS and soon introduced a competing light-sensor product. TAOS demonstrated that Intersil used its patented technology to create this competing product. Additionally, TAOS also demonstrated how Intersil secured supply contracts with Apple by using trade secrets procured from the failed negotiations.
While Intersil states that it will appeal the verdict, the case is a good example for the necessity of employing confidentiality agreements in preliminary negotiations where trade secrets are at stake. In the event a party breaches the agreement, it goes a long way to demonstrate fraud, malice and gross negligence.
Texas Advanced Optoelectronic Solutions, Inc.