''Silvaco Data Systems v. Intel Corp'' was a
trade secrets
Trade secrets are a type of intellectual property that includes formulas, practices, processes, designs, instruments, patterns, or compilations of information that have inherent economic value because they are not generally known or readily as ...
case heard before the
California Court of Appeal for the Sixth District.
Silvaco
Silvaco Group, Inc., develops and markets electronic design automation (EDA) and technology CAD (TCAD) software and semiconductor design IP (SIP). The company is headquartered in Santa Clara, California, and has a global presence with offices ...
sued
Intel
Intel Corporation is an American multinational corporation and technology company headquartered in Santa Clara, California. It is the world's largest semiconductor chip manufacturer by revenue, and is one of the developers of the x86 seri ...
for misappropriation of trade secrets because Intel used
software
Software is a set of computer programs and associated documentation and data. This is in contrast to hardware, from which the system is built and which actually performs the work.
At the lowest programming level, executable code consists ...
produced by a
third-party
Third party may refer to:
Business
* Third-party source, a supplier company not owned by the buyer or seller
* Third-party beneficiary, a person who could sue on a contract, despite not being an active party
* Third-party insurance, such as a Veh ...
that had misappropriated Silvaco's trade secrets. The
appeals court
A court of appeals, also called a court of appeal, appellate court, appeal court, court of second instance or second instance court, is any court of law that is empowered to hear an appeal of a trial court or other lower tribunal. In much of t ...
affirmed the decision of the
trial court
A trial court or court of first instance is a court having original jurisdiction, in which trials take place. Appeals from the decisions of trial courts are usually made by higher courts with the power of appellate review (appellate courts). Mos ...
to grant
summary judgment
In law, a summary judgment (also judgment as a matter of law or summary disposition) is a judgment entered by a court
A court is any person or institution, often as a government institution, with the authority to adjudicate legal disputes ...
in favor of Intel, finding that merely using infringing software does not constitute a trade secret infringement in itself.
Background
Silvaco is a California-based company that produces
electronic design automation
Electronic design automation (EDA), also referred to as electronic computer-aided design (ECAD), is a category of software tools for designing Electronics, electronic systems such as integrated circuits and printed circuit boards. The tools wo ...
(EDA) software. Silvaco makes several EDA products including
SmartSpice SmartSpice is a commercial version of SPICE (Simulation Program with Integrated Circuit Emphasis) developed by Silvaco. SmartSpice is used to design complex analog circuits, analyze critical nets, characterize cell libraries, and verify analog mixed ...
, a tool for designing and simulating
analog circuit
Analogue electronics ( en-US, analog electronics) are electronic systems with a continuously variable signal, in contrast to digital electronics where signals usually take only two levels. The term "analogue" describes the proportional relati ...
s. In December 2000, Silvaco sued Circuit Semantics, Inc. (CSI) for misappropriating Silvaco's trade secrets in the design of DynaSpice, a CSI product that competed with SmartSpice. This case went to trial, where Silvaco eventually prevailed.
Silvaco then sued several customers of CSI that had used DynaSpice, including Intel. Silvaco argued that by using DynaSpice, Intel was guilty of misappropriation of trade secrets under the California Uniform Trade Secrets Act (CUTSA). Intel
demurred; that is, they argued that, even if they had used DynaSpice, their use of DynaSpice did not constitute misappropriation of trade secrets. In particular, Intel presented evidence that they only received the
object code
In computing, object code or object module is the product of a compiler.
In a general sense object code is a sequence of statements or instructions in a computer language, usually a machine code language (i.e., binary) or an intermediate langua ...
for DynaSpice, not the
source code
In computing, source code, or simply code, is any collection of code, with or without comments, written using a human-readable programming language, usually as plain text. The source code of a program is specially designed to facilitate the wo ...
, and that because object code "does not readily yield its underlying design to human understanding", possession of object code does not imply possession of information that would be protected as a trade secret. The trial court granted summary judgment in favor of Intel, stating that:
Silvaco appealed the trial court's decision.
Opinion of the court
The appeals court affirmed the decision of the trial court, granting summary judgment in favor of Intel. Agreeing with the trial court, the appeals court found that Intel never had possession of any trade secrets belonging to Silvaco, which CUTSA defines as one of the criteria for misappropriation of trade secrets. The court distinguished between the "use" of a trade secret—which would constitute an infringement—from the "use" of the software via executing its object code. The court reasoned in part by
analogy
Analogy (from Greek ''analogia'', "proportion", from ''ana-'' "upon, according to" lso "against", "anew"+ ''logos'' "ratio" lso "word, speech, reckoning" is a cognitive process of transferring information or meaning from a particular subject ( ...
:
The court also observed that accepting Silvaco's arguments would have dire policy consequences:
Impact
Several commentators observed that the court's decision in this case clarified the application of trade secret law to software. In particular, the court's decision supports the idea that although a program's object code is derived from the program's source code, an individual possessing the object code does not possess any knowledge of any trade secrets embodied in the source code.
The appeals court decision also prompted discussion because of a lengthy footnote contained in the opinion that decried the 8,000 pages of records filed with the court for this case, to which fact Justice Rushing commented: "Seldom have so many
trees died for so little".
See also
*
Uniform Trade Secrets Act
The Uniform Trade Secrets Act (UTSA), published by the Uniform Law Commission (ULC) in 1979 and amended in 1985, is a Uniform Act promulgated for adoption by states in the United States. One goal of the UTSA is to make the state laws governing tra ...
References
{{Intel
Trade secret case law
California state case law
2010 in United States case law
United States computer case law
Intel litigation
2010 in California
Electronic design automation