Court rules that clause in Applied Materials employment contract allowing it to assert ownership over a former employee's invention is invalid and unenforceable
SHANGHAI, China and SAN FRANCISCO, CA, May 29, 2009 — Advanced Micro-Fabrication Equipment Inc. (AMEC) and San Francisco-based law firm, Morrison Foerster, today announced that AMEC has obtained a ruling on a summary judgment motion it filed in its trade secret dispute with San Jose, Calif.-based Applied Materials, Inc. The decision, a significant victory for AMEC, eliminates one of the plaintiff's arguments in the broader action, which is venued in the U.S. District Court, San Jose Division.
Specifically, Applied Materials claimed that AMEC patent applications filed by former Applied Materials employees relating to their previous work at Applied Materials should be assigned to Applied Materials because of a provision in the former employees' employment contracts. U.S. District Judge James Ware disagreed with Applied Materials, ruling that the clause restricts employee mobility which violates California's public policy and is therefore invalid and unenforceable.
The ruling represents an interim win for AMEC although it does not resolve the case entirely in AMEC's favor. The case is scheduled for trial in October.
Commenting on the judgment, AMEC chief executive officer, Dr. Gerald Yin, noted that beyond representing a win for AMEC, the decision also marks a victory for innovators, entrepreneurs and all high-tech workers in California. "We are delighted with the ruling and very pleased that it upholds the fundamental right and freedom of former employees to continue innovating and building strong technology companies. We're gratified that the attempt to restrict those innovators' rights has failed on this occasion," noted Yin.
AMEC was represented in the action by a team led by Harold McElhinny, a partner with Morrison & Foerster. Commenting on the decision, McElhinny noted, "Applied Materials is determined to do everything in its power to eliminate open competition in its markets. With this ruling, the Court has rejected one of the substantial barriers Applied tried to place in the path of employees seeking better jobs elsewhere. We hope that, as additional rulings occur in this litigation, other barriers will meet a similar fate."
About Advanced Micro-Fabrication Equipment Inc.
Advanced Micro-Fabrication Equipment Inc. (AMEC) is a leading Asia-based semiconductor equipment company with proprietary wafer fabrication solutions designed to advance technology, increase productivity and reduce manufacturing costs for leading global semiconductor manufacturers. Headquartered in the hub of the semiconductor manufacturing industry, AMEC's systems combine unique technology solutions with economic innovations for the 65/45-nm nodes and beyond. The company maintains R&D, manufacturing, business and support operations in China, Japan, Korea, Singapore and Taiwan. To learn more, please visit
About Morrison & Foerster LLP
With more than 1,000 lawyers in key finance and technology centers internationally, Morrison & Foerster offers clients comprehensive, global legal services in business and litigation. The firm is distinguished by its unsurpassed expertise in finance, life sciences, and technology, its legendary litigation skills, and an unrivaled reach across the Pacific Rim, particularly in Japan and China.
For more information, visit www.amec-inc.com.