US court issues final judgment in favour of ASML against XTAL

The judgment finalises the verdict returned by the jury back in November last year. The jury found that XTAL’s conduct as to all counts was malicious, entitling ASML to an award of punitive damages on all five counts pleaded against XTAL. The primary driver behind the jury’s verdict and the USD 845 million final judgment were saved research and development costs by XTAL, due to XTAL’s theft of trade secrets, inducing former employees to breach their contracts with ASML, aiding and abetting former employees to breach their fiduciary duty of loyalty to ASML, and multiple violations of California’s Computer Data Access and Fraud Act, a press release from ASML reads. ASML did not claim much in the way of out-of-pocket damages which were a minor element of the award. However, the judgment will be uncollectable as XTAL is in bankruptcy, but under a settlement arrangement ASML will end up owning most, if not all, of XTAL’s intellectual property (IP) through the bankruptcy process. In addition to the USD 845 million judgment, the trial court issued an injunction. The injunction orders XTAL not to conduct any software development activities on its software products that ASML alleged are contaminated with ASML’s IP, grants ASML explicit permission to reach out to actual or potential customers of XTAL and inform them of the jury’s verdict and result of the lawsuit, and bars XTAL from continued work in the same field of business as Brion for a certain period of time. There was a delay between the jury reaching a verdict in November 2018 and the final judgment being entered on 3 May 2019, due to XTAL’s attempt to avoid it by filing for bankruptcy before the trial court could enter its final judgment. In the bankruptcy case, XTAL sought to sell its intellectual property, which ASML had shown at trial was contaminated with ASML’s trade secrets. The bankruptcy court granted ASML’s motions and sent the case back to the trial court, so that it could enter the final judgment, which it has now done, the release continues. The settlement arrangement which was approved by the bankruptcy court provides closure to all the proceedings between the parties, including the trial court, appellate court, bankruptcy court, and arbitrations, in addition to ASML being awarded most, if not all, of XTAL’s IP.