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takyon writes:

The Taiwanese Supreme Court has ruled in favor of the Taiwan Semiconductor Manufacturing Company (TSMC) in a lawsuit against an ex-R&D director who leaked trade secrets to Samsung:

The Supreme Court ruled yesterday that a former senior director at Taiwan Semiconductor Manufacturing Company (TSMC, 台積電) cannot work for rival company Samsung in any way before the end of this year, over concerns about revealing trade secrets to the competitor. Previously, in a lower court, a judgment was issued against TSMC, stating that forbidding Liang Mong-song (梁孟松) from holding offices in other companies violates his right to work. In a later appeal, Liang was banned from working for Samsung before the end of this year, which the Supreme Court yesterday let stand.

The Supreme Court explained that if he continued to work for Samsung during this time, the market competitiveness advantages of TSMC will severely be impaired, which will affect the semiconductor foundry industry in Taiwan. [...] TSMC stated that according to a comparison report conducted by specialists, the differences in nanometer technology between Samsung and TSMC have rapidly decreased over the years. The 16 nm and 14 nm FinFET products produced in massive quantities by both companies this year were very similar. "Simply by analyzing the structure, it is hard to differentiate which was made by Samsung or TSMC," the report said.

Legal experts point out that this final judgment is a first in the technology industry and in judicial circles. Taiwan courts have never restricted senior managers of enterprises from working for competitors, even after the end of their non-competition clause's expiry.

From The Register:

Among TSMC's accusations is that Liang gave Samsung its 28nm process tech at a time when TSMC was leading the semiconductor industry. Its claim is that the leaked secrets gave Samsung the advantage it needed to later leapfrog TSMC to the 16nm and 14nm process nodes.

Liang spent 17 years at TSMC, during which he reportedly earned a salary and bonuses of more than NT$36m ($1.1m/£704,000) per year, on average. When he left the company in 2009, he told TSMC that he planned to go into academia and soon took a job at Taiwan's National Tsing Hua University. But six months later he turned up at a different institution: Sungkyunkwan University, in South Korea. Sungkyunkwan is a private research university with campuses in Seoul and Suwon, and Samsung is its major backer. The move raised red flags within TSMC almost immediately, but it didn't file suit against Liang until 2011, by which time he had already officially accepted a job at Samsung proper. Still, in its complaint, the Taiwanese firm alleged Liang was "already leaking TSMC trade secrets to Samsung" by the time he joined Sungkyunkwan.

Liang has denied the charges, saying he would never do anything to harm TSMC. But he has admitted in court that he left the Taiwanese chipmaker because he was dissatisfied with a recent promotion, and he has reportedly since brought five more former TSMC execs over to Samsung.

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