Rogue employee allegedly sold SanDisk and Toshiba secrets to SK Hynix

SK Hynix is under fire from both SanDisk and Toshiba. The latter two firms claim SK Hynix stole trade secrets related to NAND flash technology. A rogue employee is believed to be at the center of the case. A former SanDisk engineer who worked at a NAND flash memory development project conducted in partnership with Toshiba allegedly sold trade secrets from both SanDisk and Toshiba after joining SK Hynix in 2008.

Here's SanDisk's press release on the matter:

SanDisk Corporation, a global leader in flash storage solutions, today announced that it has filed a civil lawsuit against Korea's SK Hynix, Inc., SK Hynix America and related entities in Santa Clara Superior Court. The lawsuit seeks damages, an injunction and other remedies against Hynix for trade secret misappropriation under California's Uniform Trade Secret Act. Additionally, SanDisk has submitted a criminal complaint with the Tokyo Metropolitan Police Department against a former employee.

These actions relate to the theft of trade secrets related to NAND flash technology by a former engineer of SanDisk who left the company in 2008 to work for SK Hynix. This engineer is alleged to have illegally taken SanDisk's proprietary technical information and to have subsequently provided it to SK Hynix. Tokyo Metropolitan Police today announced the arrest of the former employee, who worked at SanDisk's joint venture manufacturing facility in Yokkaichi, Japan. SanDisk has been and continues to cooperate with law enforcement in their investigation.

SanDisk's joint venture relationship with Toshiba Corporation has been in place for nearly 15 years and represents one of the most successful partnerships in the semiconductor industry. SanDisk and Toshiba together have enabled more than 10 generations of NAND flash technologies over these years.

"SanDisk strongly believes in the value of IP, and takes protecting trade secrets seriously," said Judy Bruner, executive vice president, administration, and chief financial officer at SanDisk. "We are working diligently with the authorities as well as our partner on these matters and are aggressively pursuing all legal remedies available to us."

And here's Toshiba's take:

Toshiba Corporation today announced that it has brought a civil suit against Korea's SK Hynix Inc. at the Tokyo District Court, under Japan's Unfair Competition Prevention Act. The suit seeks damages for the wrongful acquisition and use of Toshiba's proprietary technical information related to NAND flash memory, which Toshiba pioneered in 1987 and now jointly develops and produces with SanDisk Corporation of the U.S.

Toshiba filed the suit on learning that a former employee of SK Hynix has been arrested in Japan for alleged criminal infringement of the Unfair Competition Prevention Act. The employee formerly worked for SanDisk in a NAND flash memory development project conducted in partnership with Toshiba at Yokkaichi Operations, Toshiba's flash memory technology development and mass production base in Mie prefecture, Japan. The employee is alleged to have illegally taken Toshiba's proprietary technical information in 2008, and to have subsequently provided it to SK Hynix.

SK Hynix is a business partner of Toshiba. However, the companies are also competitors in NAND flash memory, one of Toshiba's core technologies, and given the scope and importance of the misappropriated technical data involved, Toshiba has no reasonable option other than to seek legal redress.

Moving forward, Toshiba will construct a more robust system for protecting its intellectual property and preventing its loss, and respond resolutely to unfair competition, in order to maintain the advanced technical competence that is the source of its competitive strength.