Ex-AMD Workers at Nvidia Lose Bid to End Secrets Lawsuit

Former employees of Advanced Micro Devices Inc. (AMD) lost a bid for dismissal of claims that when they joined competing chipmaker Nvidia Corp. (NVDA) they disclosed trade secrets and urged ex-colleagues to follow them.

U.S. District Judge Timothy Hillman in Worcester, Massachusetts, today rejected a motion to dismiss claims including misappropriation of trade secrets and breach of contract. The judge did grant a request to throw out a claim of unfair competition.

“Plaintiff has demonstrated a likelihood of success on the merits with regard to misappropriation,” Hillman said in an order denying most of the defendants’ motion.

AMD, based in Sunnyvale, California, accused the ex-employees of taking sensitive company documents when they went to work for Nvidia. The former employees transferred more than 100,000 electronic files pertaining to AMD’s graphics-processor business in the days before their departure, AMD said in a complaint filed in January. The employees also allegedly recruited other AMD workers to leave the company.

“The facts clearly outlined in our pleadings are supported by forensic evidence,” Michael Silverman, a spokesman for AMD, said today in an e-mail. “Current and former AMD employees are contractually required to honor the ongoing confidentiality and nonsolicitation obligations each agreed to while employed by us.”

Trade Secrets

Hillman last month granted AMD an injunction barring the ex-workers from disclosing trade secrets or soliciting former colleagues.

Advanced Micro said that the transferred documents included confidential information such as licensing agreements with significant customers, proposed strategies concerning licensing and technical information about new products and processes the company is developing.

Three of the former employees -- Robert Feldstein, Manoo Desai and Nicolas Kociuk -- transferred secret files to storage devices, AMD said in its complaint. Feldstein, Desai and a fourth defendant, Richard Hagen, violated agreements to not solicit other employees for a period of time after leaving the company, according to AMD.

Franklin Gowdy, a lawyer representing the defendants, didn’t respond to messages seeking comment on the ruling.

The employees all worked at AMD’s site in Boxborough, Massachusetts, according to the complaint.

A fifth former employee, Deepaksrivats Thirumalai, was added to the complaint in April.

Nvidia, based in Santa Clara, California, isn’t a defendant in the suit. Nvidia is AMD’s primary competitor in the video-game graphics chip industry, according to the lawsuit.

The case is Advanced Micro Devices v. Feldstein, 13-cv-40007, U.S. District Court, District of Massachusetts (Worcester).

To contact the reporter on this story: Don Jeffrey in New York at djeffrey1@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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