Alcatel , Samsung Settle Suit: No terms disclosed in trade secrets case

(BUSINESS) Jennifer Files

01/13/2000

The Dallas Morning News, Page 1D, Copyright 2000 Information Access Company. All rights reserved. COPYRIGHT 2000 The Dallas Morning News, L.P.

Alcatel USA Inc. and Samsung Electronics Co. settled their legal disputes Wednesday, ending a high-profile, four-year court battle between the Dallas-area branches of the two international technology companies.

Alcatel , Europe's second-biggest telecommunications manufacturer, had accused Samsung of stealing trade secrets through a scheme of identifying a team of engineers and hiring them to work on a copycat project. The engineers had worked at DSC Communications, which Alcatel later purchased.

The companies settled their claims, in which Plano-based Alcatel was seeking $425 million in damages from Richardson-based Samsung. Claims involving the employees were also settled. The companies didn't disclose the terms of the settlement, and lawyers for both sides declined to comment.

"Both companies decided that it is in their mutual best interest to settle and that this sets the stage for future cooperation," Alcatel said in a statement.

Jurors began hearing arguments in the case, filed in state District Court in Dallas, about one month ago.

Alcatel claimed the South Korean electronics company wanted to become one of the world's largest telecom manufacturers. It hired away DSC engineers working on a project that improved the way telephone networks route traffic because it believed the market for such switching technology could be worth almost $42 billion by 2005.

The employees didn't take documents or computer files with them, but Alcatel alleged that they would inevitably use its trade secrets in their work for Samsung. Samsung countered that workers have the right to move from one employer to the other and that no trade secrets were disclosed. The alleged trade secrets caused unusually heightened concerns about publicity in the trial. State District Judge David W. Evans issued an order barring spectators while exhibits determined to be trade secrets were discussed, unless the spectators agreed to sign nondisclosure agreements. The Dallas Morning News, among others, appealed the order but lost.

Alcatel and Samsung also spent a total of about $1 million to renovate Judge Evans' courtroom, its offices and an adjacent courtroom, adding high-tech monitors and better Internet access to facilitate their multimedia presentations.