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AMD execs left to join NVIDIA, took 100,000 confidential docs

by Mark Tyson on 16 January 2013, 12:13

Tags: AMD (NYSE:AMD), NVIDIA (NASDAQ:NVDA)

Quick Link: HEXUS.net/qabrnv

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AMD is taking four ex-employees to court, accusing them of copying over 100,000 confidential documents before they left to join rivals NVIDIA. The employees include a former vice president and three managers. AMD summarises the case as “An extraordinary case of trade secret transfer / misappropriation and strategic employee solicitation”.

AMD has managed to get a temporary restraining order over the four employees, now at NVIDIA, “ordering the preservation of any copies of AMD materials they may have, any computers or devices they may own, and must not divulge or use any AMD confidential information,” according to a report on ZDNet. AMD has been feeling the pinch in the last couple of years as the desktop PC market contracted while it wasn’t geared up for mobile and tablet component production. Due to this business realignment the chipmaker has been selling off properties and shedding employees from all ranks. Now it looks like some of the former employees went rogue.

Former AMD vice president of strategic development, Robert Feldstein, one of the accused, left the company in July. During his time at AMD he was instrumental in getting AMD graphics hardware
built into the next generation of games consoles.

The files, exceeding 100,000 in number, “include obviously confidential, proprietary, and/or trade secret materials relating to developing technology and/or highly confidential business strategy,” and specifically the following “three highly confidential files - two licensing agreements with significant customers, and a document outlining proposed strategies to AMD's strategic licensing” reports ZDNet. AMD says these documents could be used by NVIDIA for unfair competitive advantage.

AMD uncovered evidence of these underhand shenanigans and said that the former employees named in the suit “transferred to external storage devices trade secret files and information in the days prior to their leaving AMD to work for Nvidia.” One of the managers even searched the internet several times for information on how to copy and delete large numbers of documents. Further to the document copying, AMD accuses two of the former employees of actively recruiting other AMD executives to join them at NVIDIA.

Eurogamer quotes AMD’s lawyer on the matter, he says that AMD is seeking “actual damages, consequential damages, double or treble damages where allowed by law, costs of suit and reasonable attorney fees, together with pre-judgement and post-judgement interests as allowed by law. AMD also seeks any other further relief, at law or in equity, to which it may be justly entitled.”

We’ll let you know of any significant developments in this case when news becomes available.



HEXUS Forums :: 15 Comments

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Query to those with more legal savvy than me.

Okay so they are going after the employees BUT unless they can prove NVIDIA had any knowledge/active role in this, do they have any claim against NVIDIA?
According to the article, they're after the ex-employees ATM but whether that changes will likely depend on future evidence. If Nvidia knowingly accepted/used/abused the documents, then they will likely find themselves a target too.

In the past, a few companies have done the right thing and reported to the police/other company about rogue employees etc, I can't remember off the top of my head who but it was fairly recent.
Hi Watercooled

I get that from the article. My qestion is that if NVIDIA benefitted from the theft of these documents but did not know about it (or at least cannot be proven to have kniown about it) - can they be held liable in any way?
I'm not sure TBH, I guess it would depend what exactly was in the documents and if it could be easily recognised as AMD property or whatever. Stuff like detailed, far-looking timelines for instance, could be disastrous if people high up in Nvidia got a look at them, and they can't be forced to forget, so Nvidia could profit by knowing when to release products and at what performance target to compete with AMD. AMD would likely have to re-do their timelines etc, and/or bring forward products to avoid Nvidia stealing market share with unfair competition - this would cost AMD real money, and Nvidia would have had a better chance to defend themselves if they reported the illegal espionage as soon as they became aware of it.

TL-DR: No idea, law isn't a strong point of mine. :P
recieving stolen goods is a crime .. wether you know or not ..and the amd letterhead would be a good give away .. :)