GlobalFoundries Sues IBM, Again

Bad blood between IBM and GlobalFoundries continues, after the latter announced a fresh lawsuit against Big Blue.

New York-based GlobalFoundries on Wednesday announced that it has now sued IBM for trade secret misappropriation. The complaint asserts IBM unlawfully disclosed confidential IP and trade secrets belonging to GlobalFoundries, after IBM sold its microelectronics business to the firm in 2015.

According to GlobalFoundries, the technology at issue was collaboratively developed, over decades, by the companies in Albany, New York and the sole and exclusive right to license and disclose that technology was transferred to GF upon the sale.

Previous lawsuit

In 2015 IBM had admitted defeat in its efforts to crack the semiconductor business, and actually paid Globalfoundries $1.5 billion to take over IBM’s loss-making chipmaking operation.

As part of that deal, Globalfoundries agreed to supply Power processors in return for access to IBM manufacturing process intellectual property, as well as the physical assets of IBM Microelectronics.

It should be noted that back then, Globalfoundries placed little or no value on IBM’s factories due to their age.

The firm is a contract chip maker and is the fourth-largest semiconductor manufacturer in the world, after it was spun out of AMD’s former microprocessor business back in 2009.

GlobalFoundries used to be a unit of Abu Dhabi’s state-owned fund Mubadala until an initial public offering (IPO) in October 2021.

In June 2021 GlobalFoundries sued IBM and asked a US judge to rule that it did not violate a contract with Big Blue, after the tech veteran had claimed $2.5 billion in damages.

Essentially Big Blue alleged that GlobalFoundries violated a manufacturing agreement that was reached eight years ago between the two parties.

That litigation is still ongoing, a GlobalFoundries spokesperson told Reuters.

Fresh lawsuit

Now on Wednesday GlobalFoundries said it has sued IBM again.

The lawsuit, filed in federal court in the Southern District of New York, sees GlobalFoundries allege that “IBM unlawfully disclosed GF IP and trade secrets to IBM partners including Intel and Japan’s Rapidus, a newly formed advanced logic foundry, and by doing so, IBM is unjustly receiving potentially hundreds of millions of dollars in licensing income and other benefits.”

The complaint notes that IBM’s executives have described the Intel and Rapidus partnerships as based on decades of technology derived from research conducted at the Albany NanoTech Complex, technology that GF alleges Big Blue had no right to disclose.

GF is asking for compensatory and punitive damages as well as an injunction against IBM preventing further unlawful disclosure and use of GF’s trade secrets.

In addition, GF’s complaint asserts that IBM is targeting and recruiting GF’s engineering talent at the company’s manufacturing facility, which is located near the Albany NanoTech Complex.

In the complaint, GF asks the court to end the unlawful recruitment efforts, which have accelerated since the IBM/Rapidus announcement in December 2022.

IBM response

IBM hit back in an emailed statement to Reuters about the latest GlobalFoundries lawsuit.

“GlobalFoundries filed this meritless lawsuit after a court rejected the company’s attempt to dismiss IBM’s legitimate fraud and breach of contract claims,” Big Blue reportedly said.

“Their allegations are entirely baseless, and we are confident that the court will agree.”

Intel declined to comment and Rapidus was not immediately available, Reuters noted.