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Defendants in Samsung case deny industrial espionage charges

All Headlines 17:22 March 12, 2010

By Kim Eun-jung

SEOUL, March 12 (Yonhap) -- Nineteen people indicted for stealing Samsung Electronics' chip-making technologies pleaded not guilty in their first court hearing in Seoul Friday, insisting that the technologies were never offered to other chipmakers.

The 19 defendants -- 10 employees from U.S.-based Applied Materials Inc., the world's biggest chip-gear maker, four from Samsung Electronics and five from Hynix Semiconductor Inc. -- are accused of stealing Samsung's business secrets from March 2005 to December last year and providing them to Hynix through Applied Materials.

In a written statement, prosecutors noted 13 out of a total of 95 core technology items were allegedly leaked to Hynix through employees of Applied Material Korea Co. (AMK), the South Korean unit of the U.S. firm, which is under contract with both Samsung and Hynix to provide semiconductor equipment.

However, during the court hearing at the Seoul Eastern District Court, the lawyer for the Hynix employees argued that the technologies, which use copper for making semiconductors, weren't applied to Hynix's chip development and manufacturing process.

"The prosecution's indictment is based on the assumption that Hynix's chip-making technology lags behind Samsung Electronics', and technologies were allegedly leaked that were used in the chip-making process," the lawyer said. "There is no direct evidence that Hynix inspired its employees to collect such information, and it is not true."

Another lawyer for the AMK employees also said it is questionable whether the information can be considered a "trade secret" if it was already public.

The case highlights the intense competition among chipmakers and other sellers of high-tech products, who are frequently embroiled in technology espionage cases over patent rights.


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