VIA Sues Asus Group Companies and Executives for Damages of NT$4.137 billion in Trade Secrets Misappropriation Suit

  VIA Sues Asus Group Companies and Executives for Damages of NT$4.137 billion
  in Trade Secrets Misappropriation Suit

Action Follows Decision by Taiwan Prosecutor to Pursue Criminal Proceedings
Against Asmedia, A Subsidiary of Asustek Computer, Inc., and Four of Its
Employees

Business Wire

TAIPEI, Taiwan -- December 17, 2013

Following the decision by the Taiwan Prosecutor to pursue criminal proceedings
against a subsidiary of Asustek Computer, Inc. (TSE: 2357) and four of that
subsidiary’s employees for the alleged misappropriation of trade secrets from
VIA Technologies, Inc. (TSE: 2388), VIA today announced that it has filed a
civil suit in the Taipei District Court seeking damages of at least NT$4.137
billion (US$138 million) from Asustek Computer, Inc and its subsidiary Asmedia
Technology.

The lawsuit is being filed to recover the losses incurred as a result of the
alleged misappropriation of VIA intellectual property related to USB
technology. Also named in the suit are Asmedia Chairman Jerry Shen, Asmedia
President Lin Chewei, and other Asmedia employees involved in the case.

“As a long-time leader in IC design and technology innovation, VIA strongly
believes in the importance of protecting intellectual property rights,”
commented Wenchi Chen, CEO of VIA Technologies, Inc. “In addition to
protecting interests of VIA and our shareholders, the aim of this suit is to
ensure our industry operates in a healthy market environment that fosters
innovation and promotes fair competition.”

On 8 November 2013, the Taiwan Prosecutor decided to pursue criminal
proceedings against Asmedia and four employees, including Chang Chi, VP of
R&D, after the conclusion of its investigation into the alleged
misappropriation of VIA’s trade secrets, as well as violation of Copyright
Act. In addition to seeking damages, VIA is also requesting the court to
instruct Asmedia to cease the production and sales of the allegedly infringing
products.

Taiwan amended its Trade Secret Act earlier this year to enhance its IP
protection laws. One key reform included increasing the penalties for
intellectual property crimes, so anyone who misappropriates trade secrets in
Taiwan with the intent to use them overseas may be imprisoned for up to 10
years and fined up to US$1.7 million, or possibly more if there are
substantial illicit gains.

The lawsuit alleges that a former VIA executive, Chewei Lin, left VIA in 2007
and joined Asmedia (controlled by Asus Group), taking dozens of VIA employees
with him, and also VIA’s intellectual property related to USB technology,
including host controllers and device controllers. Those products are used in
many computing and consumer electronics products, including PCs, external Hard
Disk Drives, and peripheral devices. Asustek Computer, Inc. is the largest
single purchaser of Asmedia USB products.

Prior to that, Asmedia had no expertise in the USB field, according to the
lawsuit. Given the complexity and legacy USB 1.0, 1.1, and 2.0 IP required for
the development of USB 3.0 chips, the Taiwan Prosecutor concluded in the
criminal case filing that “it is extremely difficult to develop and take such
chips into mass production in such a short time frame [of one year].”

According to the results of investigation carried out by the Taipei District
Prosecutor, the evidence of trade secret theft is strong enough to justify the
criminal prosecution of Asmedia and four Asmedia employees, including R&D VP
Chang Chi.

The total Asus Group stake in Asmedia is 56.23%. Asustek Computer, Inc is
Asmedia’s single largest shareholder with a stake of 43.89% and two other
subsidiaries hold the remainder. Asustek Computer, Inc is the largest single
customer of Asmedia. Asmedia Chairman Jerry Shen is also the General Manager
of the Asus motherboard business unit.

About VIA Technologies, Inc.

VIA Technologies, Inc is the foremost fabless supplier of power efficient x86
processor platforms that are driving system innovation in the PC, client,
ultra mobile and embedded markets. Combining energy-saving processors with
digital media chipsets and advanced connectivity, multimedia and networking
silicon enables a broad spectrum of computing and communication platforms,
including its widely acclaimed ultra compact mainboards. Headquartered in
Taipei, Taiwan, VIA’s global network links the high tech centers of the US,
Europe and Asia, and its customer base includes the world’s top OEMs and
system integrators. www.via.com.tw

Note to reporters, editors and writers: VIA is written in ALL CAPS.

The names of actual companies and products mentioned herein may be the
trademarks of their respective owners.

Contact:

VIA PR Contacts
US: Lew Phelps
Phone: 310-890-7369
Email: Lew_Phelps@sitrick.com
or
International: Richard Brown
Phone: 886-926068016
Email: RIBrown@via.com.tw
 
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