Monolithic Power Systems, Inc. v. Silergy Corp.

ORDER DENYING IN PART AND GRANTING IN PART MOTION TO DISMISS, AND DENYING MOTION TO STAY

Breach of Contract

Silergy and Chen’s motion to dismiss MPS’s breach of contract claim is denied.

The breach of contract claim is based on the “Nondisclosure” provision of a settlement agreement reached by the parties to resolve prior litigation. The nondisclosure provision states as follows: “Dr. Chen represents and warrants not to use or disclose any document that contains MPS confidential information, including all documents that Dr. Chen received or sent while he was employed by MPS.” MPS alleges that Chen and Silergy are breaching this nondisclosure provision by “incorporating information obtained from” documents Chen previously stole from MPS “into Silergy’s flip chip package products....”

Silergy and Chen respond that there can be no breach of contract as a matter of law because the alleged theft of the documents took place before the parties reached their settlement agreement, and the alleged use of the documents also began before the parties reached their settlement agreement. They point to language in the agreement by which MPS releases Chen and Silergy from any claims “relating…