Kirk Laney has faced one of the greatest fears of most entrepreneurs. The Plano businessman lost one of his biggest customers, technology giant Apple, to a Silicon Valley rival peddling technology that was stolen from him. Though an eight-year legal blaze has simmered, the fire isn’t out just yet. “It’s a competitive landscape, and we kind of got blindsided,” says Laney, founder and CEO of ams-TAOS. “[This] was our highest profile product.”
The product at the crux of the flap is ams-TAOS’ ambient light sensors, which enable mobile devices to adjust their brightness according to the environment and disable the screen when the user is on a call. Ams-TAOS initially was awarded $88.9 million in March 2015, when the U.S. court for the Eastern District of Texas, the Sherman Division, located in Plano, ruled against publicly traded Intersil for breach of contract, patent infringement, misappropriation of trade secrets, interference, and damages.
In June 2016, the final judgment came to $77 million, which accounted for duplicative damages and interest. Intersil, which declined to comment, has filed for appeal. Ams-TAOS has also filed an appeal, which includes a request for a permanent injunction. “This certainly is one of the largest pieces of litigation I’ve been involved in and probably the longest,” says Michael McCabe, a partner at Munck Wilson Mandala LLP who brought TAOS to the firm as a client.
The legal saga began after Laney’s company, then called Texas Advanced Optoelectronic Solutions Inc., sued Intersil in 2008. TAOS claimed that it had presented Intersil with private information about its technology as part of the negotiation process to sell the company. But Intersil came back with an offer that “was not in good faith” and cut communications before dropping the offer altogether, court documents state. Intersil then began selling a product that was “remarkably similar, if not identical,” to TAOS’ product, the suit continues. By offering a lower price for allegedly the same technology, Intersil was able to earn the bid of one of TAOS’ largest customers, Apple, which had used TAOS’ technology in its first-generation iPhones.
TAOS sued Intersil for breach of contract, patent infringement, and interfering in its business relationships. Intersil filed a counterclaim in 2009, suggesting that the initial lawsuit was a “malicious, bad-faith attempt to interfere” with Intersil’s business. “It was a challenge,” Laney admits, adding that the company was just trying to stay alive. “So 2008 to 2015 were painful years.”
Laney spent 35 years as a technology engineer, the last 19 in optoelectronics for Texas Instruments, from which his Plano company was spun off. The technology that Laney spent years developing was swiped up in a matter of weeks.
Laney kept his emotions in check during the litigation, though. He shielded most of his team from the legal proceedings and was able to grow the company’s revenue to $130 million in 2011. He also strengthened the company’s offerings, which helped win back prized customer Apple. The growth attracted Austriamicrosystems AG, which bought TAOS for $320 million that year. Now ams-TAOS trades on the SIX Swiss Exchange and employs 2,100 people across the globe; it generated nearly $700 million in 2015.
Laney has a couple of final hills to climb before his rough legal journey ends. But after thriving during the litigation marathon, he expects to emerge from this second trek unscathed.