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TSMC files against China chipmaker

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TAIPEI (Reuters) -- Taiwan Semiconductor Manufacturing Co (TSMC), the world's largest contract chipmaker, says it has filed a law suit against China's Semiconductor Manufacturing International Co (SMIC) for patent infringement.

TSMC said in a statement Monday that SMIC allegedly infringed on multiple patents and stole trade secrets. TSMC filed the suit in the U.S. District Court of Northern California on Friday.

The complaint also asks for an injunction to stop the infringements and demands monetary damages. TSMC also said SMIC had hired over 100 former TSMC employees.

The law suit comes after a string of complaints this year from Western technology, auto and media firms against Chinese firms, alleging copyright infringements.

"We feel that we have no other choice than to proceed through the courts in order to protect our technology," Dick Thurston, Vice President and General Counsel for TSMC, said in a statement.

"It is our obligation to protect our patents and trade secrets to maintain shareholder value."

SMIC said it had not received any official notice of the action and had no comment. "We want to emphasize that we always respect intellectual property rights of any third party," a spokesman added.

SMIC's chief executive is Taiwan-born chip industry veteran Richard Chang, who was the former head of Worldwide Semiconductor Manufacturing Corp, which was absorbed by TSMC in 2000.

China's semiconductor industry is being underpinned by Taiwan investors: one of Grace Semiconductor Manufacturing Corp's (GSMC) founders is Formosa Plastics scion Winston Wong, while SMIC is understood to have Taiwan investor backing.

The previous highest profile technology patent lawsuit against a Chinese firm was Cisco Systems Inc's action earlier this year against China's largest telecoms gear maker, Huawei Technologies.

The lawsuit was suspended in October after Huawei agreed to stop selling disputed products.

Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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