Microchip Technology sues Chinese company for alleged piracy - East Valley Tribune: Business

Microchip Technology sues Chinese company for alleged piracy

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Posted: Thursday, July 5, 2007 11:52 am | Updated: 7:34 pm, Fri Oct 7, 2011.

Microchip Technology, the Chandler-based company that is one of the world’s largest producers of microcontrollers, has filed a copyright infringement lawsuit in China against a company it accuses of pilfering its intellectual property.

The suit, filed in the Shanghai Number 1 Intermediate People’s Court, accuses Shanghai Haier Integrated Circuit Co. of making unauthorized copies of the microcode embedded in Microchip’s microcontrollers and datasheets that detail the use and operation of those chips. SHIC used the copied material to file its own patent in China, Microchip said.

The datasheets and microcode are copyright-protected in both the United States and China, the Chandler company said.

Microchip is demanding that SHIC cease its infringement, dispose of copied chips and compensate Microchip for as-yet-unspecified loses and damages resulting from the alleged theft, said Dave Yeskey, head of Microchip’s legal department.

Microchip also said it filed administrative actions against SHIC with the China State Intellectual Property Office to invalidate SHIC’s patent.

“Intellectual property is the backbone of our company and our industry,” said William Yang, Asia Pacific vice president. “When we find out that our intellectual property has been infringed upon, it is important for us to take action to protect our assets.”

In a statement, SHIC called the allegations “untrue.” The Chinese company said its semiconductors are “self-developed” and not fully compatible with Microchip’s devices.

“SHIC will fight for the truth and our rights,” the statement said.

Microchip filed a related legal action against Linkage Technology Co. of Hsinchu, Taiwan, which is the Taiwanese distributor for SHIC.

It is the first intellectual property case that Microchip has filed in the Chinese court system, Yeskey said.

“We believe the government is cognizant of issues involving intellectual property rights . . . and we believe the Chinese court system will look at the merits of our claims,” he said.

Although China has long been a leading source of counterfeit goods, Shanghai is probably the best location in China for an American company to receive a fair hearing, said Buck Pei, associate dean of the W. P. Carey School of Business at Arizona State University.

“It aspires to be an international city and guards its image fairly carefully,” he said. “The city has been trying to attract multinationals to move higher-level research and development to Shanghai. If international opinion senses any degree of bias, it is not to Shanghai’s advantage.”

China, Hong Kong and Taiwan account for about 28 percent of Microchip’s revenue, and Chief Executive Steve Sanghi said the suit does not change his company’s commitment to the Chinese market.

“We will continue to invest and grow our business in China,” he said. “We will also continue to help China develop its future talent through our educational outreach initiative,”

Microcontrollers are tiny chips that direct the operation of many products including appliances, consumer electronics, automobiles, telephones and industrial automation. The microcode is the set of instructions programmed into the chip that tells the product how to function.

- Associated Press contributed to this report.

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