''Silvaco Data Systems v. Intel Corp'' was a

trade secrets Trade secrets are a type of intellectual property that includes formulas, best practice, practices, business process, processes, designs, legal instrument, instruments, patterns, or compilations of information that have inherent economic value be ...

case heard before the California Court of Appeal for the Sixth District. Silvaco 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 that had misappropriated Silvaco's trade secrets. The appeals court 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). Mo ...

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 for one party and against another party summarily, i.e., without a full trial. Summary judgments may be issued on the merits of ...

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 electronic systems such as integrated circuits and printed circuit boards. The tools work togethe ...

(EDA) software. Silvaco makes several EDA products including SmartSpice, 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 relat ...

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 langu ...

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 ...

, 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".

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

Background

Opinion of the court

Impact

See also

References