Toshiba, SanDisk seeks legal action against memory rivals over alleged theft of trade secrets

On Thursday, Toshiba and NAND flash joint-venture partner SanDisk has files lawsuits against its competitor, claiming that SK Hynix and its subsidiaries has stolen and misused its confidential trade secrets. The lawsuits, said PCWorld arose from the arrest of SK Hynix employee Yoshitaka Sugita by the Tokyo’s Metropolitan Police Department also on Thursday over trade secrets theft charges. The lawsuits were filed by the memory company in Japan and the US.

According to the lawsuit, Sugita stole trade secrets when he was an employee of a venture of SanDisk and Toshiba. Sugita allegedly passed the information he stole to his succeeding employer for the latter to gain competitive advantage to the former despite signing a non-disclosure agreement after leaving SanDisk-Toshiba. PCWorld said Toshiba and SanDisk has a fabrication plan that manufactures NAND flash under the companies' joint venture agreement in Yokkaichi, Japan. The companies reportedly made the trade secrets theft report to police on Thursday, which led to Sugita's subsequent arrest. SanDisk said in a statement that Sugita is cooperating with authorities.

In the Tokyo lawsuit filed in the Tokyo District Court, the companies complained that SK Hynix has violated the country's Unfair Competition Prevention Act. According to a statement, Toshiba is seeking damages for the acquisition of the company's proprietary technical information related to NAND flash memory via illegal means. The lawsuit filed by SanDisk in the Santa Clara Superior Court also on Thursday is seeking legal action also against SK Hynix's US subsidiary and is seeking damages for violations committed by the latter under the Uniform Trade Secret Act of California.

Toshiba said that although SK Hynix is a business partner, the lawsuit it filed against the company ihas been done as a means of redressal.

When asked for comments about the lawsuits filed by Toshiba and SanDisk, a spokesman for SK Hynix in South Korea said that the company is still verifying the lawsuits and have no further statement.

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Toshiba-SanDisk joint venture, Toshiba-SanDisk trade secrets theft

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