Friday, February 06, 2009, 2/06/2009 11:01:00 AM

International Rectifier's RICO Case Dismissed in California

By Todd
We first covered this case in our blog post here: International Rectifier had accused its former CEO, Alexander Lidow, of engaging in a violation of RICO by stealing the company's trade secrets in an effort to bolster a newly-created competitive company.

Los Angeles Business Online is nor reporting International Rectifier Corp. lost that battle.

The El Segundo maker of power management chips filed the suit in September, alleging that Lidow engaged in an ongoing criminal enterprise — also known as a racketeer influenced and corrupt organization, or Rico — by stealing information and intellectual property related to the company’s $60 million secret research. The judge dismissed the suit on Monday.

International Rectifier claimed that Lidow devised a plan to steal IR’s trade secrets, and then recruited former researchers and sales executives to help him launch a competing company.
Federal judge Manuel Real threw out International Rectifier’s suit, ruling that the company failed to properly plead its claim that Lidow, and the other former IR employees, where involved in a criminal enterprise.

“We are happy the court recognized they hadn’t pleaded a Rico claim,” said Robert Sacks, the L.A. litigator who represented Lidow in the case.

Graham Robertson, a spokesman for International Rectifier, said the company is evaluating its next move in its battle with Lidow.

“We are reviewing the options,” Robertson said.

We wonder if one of the options International Rectifier is considering is bringing claims under California's Trade Secrets Act or maybe even going federal with an Economic Espionage Act claim. We'll keep you posted.

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