ENCINO, Calif. — A showdown between two competing power-solution companies headquartered in California is set to play out before a Delaware court.
Monolithic Power Systems, headquartered in San Jose, has filed a lawsuit against competitor Intersil of Milpitas, accusing the company of stealing trade secrets.
According to a news release on its website, MPS has asserted that Intersil unlawfully gained confidential information that belonged to MPS and claims the company then used it to create falsehoods about the circuit design and operation of MPS product, according to a news release by Intersil. MPS said the purpose of Intersil’s action was to deter customers and potential customers from using MPS products and encouraged them to purchase Intersil ones instead.
“Their first cause of action is for defamation, and their second cause of action is for interference and then unfair competition and trade secrets,” David Gurnick, an attorney at Lewitt Hackman in Encino, told the Northern California Record.
Gurnick’s practice focuses on trademarks, copyrights, trade secrets and other similar cases.
"They are saying that Intersil is going to Monolithic customers and that they got some confidential information from a customer, and now they are using that and disclosing it to other customers," he said.
However, Intersil said it will be “vigorously” defending themselves against a lawsuit filed with the U.S. District Court in Delaware by MPS. Intersil says it opposes the company’s legal claims against it, but declined to discuss the pending litigation.
The litigation has been filed in Delaware, where MPS is incorporated, Gurnick said.
“I suspect they feel that they will have a more favorable forum in Delaware,” he said. “Delaware is a little more generous in it’s respecting of trade secrets or its protection of trade secrets.”
Gurnick also said the law MPS has accused Intersil of breaking is fairly new.
"They are bringing their claim under the relatively brand-new, federal misappropriation trade-secrets law. That was signed into law by the president just a couple months ago,” he said, adding they were also calling on parts of Delaware law.
He said it is difficult to determine how the case will play out as there still are things that could develop that would favor either side.
"It could develop if there is merit to their claims,” Gurnick said, "And it could develop that the claim lacks merit that Monolithic is over-reacting to a developing competition situation.”
He said it seemed similar to litigation brought by Mattel against the Bratz dolls.
"In that litigation, it was Mattel vs. Bratz, there was one trial where Mattel won when they claimed that Bratz was using Mattel secrets,” he said. “Then there was another trial where Bratz won and the jury found that Mattel had violated Bratz's secrets.
"That case illustrates the fact that you have highly competitive litigation that could play out in different ways."
MPS is asking for unspecified damages as well as a court injunction against Intersil.
Intersil develops power-management and analog solutions and creates products for mobile and other electronics that help extend battery life.
MPS also develops products that extend the battery life of electronics. The company's website indicates it develops green, compact solutions for customers.