Silvaco seeks 'trade secrets' injunction against ex-employee

Electronic News, Sept 26, 1994

SAN JOSE, CALIF.--Former Silvaco International executive Keenan K. Klinger and his one-time employer are due in court this week for a hearing on a temporary restraining order Silvaco is seeking against Mr. Klinger. The company filed suit against Mr. Klinger late last month, charging breach of contract and misappropriation of trade secrets, and it wants an injunction to prevent Mr. Klinger from sharing "certain confidential information and trade secrets regarding Silvaco's business...with others outside of Silvaco."

According to documents filed with the Santa Clara County Superior Court, Silvaco "terminated" Mr. Klinger in June after discovering that he was "developing a business plan for a new venture designed to compete with Silvaco by taking inappropriate advantage of Silvaco's trade secrets (primarily customer names, contacts and requirements, and software enhancements under development) and intellectual property (primarily software enhancements and source code acquired through license)." He was terminated "primarily on the grounds of conflict of interest, secondarily on the grounds of lack of performance against sales quotas," the complaint states.

"I certainly have no interest in discussing Silvaco with anyone else," Mr. Klinger said last week. He called the suit "much ado about nothing."

Mr. Klinger was hired last year as Silvaco's vice president of sales and marketing (EN, People in the News, June 28, 1993), and later was promoted to executive vice president and chief operating officer. The Santa Clara, Calif.-based company makes technical computer-aided design (TCAD) software for semiconductor design.

"During Klinger's exit interview and in subsequent conversations, Silvaco has repeatedly asked Klinger to certify that he had retained none of Silvaco's confidential information," the complaint says. "He has consistently refused. Klinger's reluctance to certify that he has not retained Silvaco confidential information leads Silvaco to believe that Klinger has, in fact, retained such sensitive information and either has, or threatens to, disclose that confidential information to others."

Silvaco (which also does business as Silvaco Data Systems) is also seeking repayment of $28,218.79 from Mr. Klinger, the balance due from an interest-free $40,000 loan it extended to him when he was hired in 1993. Mr. Klinger was to periodically repay the loan from sales commissions over a three-year period.

In a memorandum filed with the court, Silvaco general counsel Pamela M. Schuur reported that Mr. Klinger "has, for the most part, been cooperative. For example, Klinger has signed a stipulation for entry of permanent injunction to avoid use of the trade secrets for which Silvaco initiated the termination. Silvaco has, upon receiving Klinger's signature, withdrawn its objection to Klinger's receiving unemployment benefits.

"However, one issue remains a sticking point. Klinger refuses to certify that he has retained no confidential information regarding Silvaco, that he has destroyed whatever materials he had, or that he has returned everything to Silvaco. It became apparent to Silvaco on or about August 18, 1994, that no amount of friendly discussion would bring about a resolution on this issue."

Silvaco is a company which has known a number of legal battles in recent years. Ivan Pesic, the company's president, last year was charged with perjury in relation to another civil case with a competing software vendor, Technology Modeling Associates (EN, Nov. 15, 1993). Mr. Pesic was acquitted by a jury early this year.

In a declaration to support the application for a court order against Mr. Klinger, Ms. Schuur wrote, "Beginning in late May 1994 and continuing for several weeks, certain Silvaco employees observed that Klinger was devoting what appeared to be a substantial amount of time to personal business while at Silvaco."