For Immediate Release
Nov 15, 2006
Contacts:
John Corey
GreenTarget Global Group
312.252.4102 | |
An Open Letter to Those Concerned About Piracy in International Trade
From John Zei, President and CEO, Knowles Electronics, LLC
Knowles Electronics is the world's leading manufacturer of high performance, subminiature microphones and speakers serving a variety of applications and markets. For more than fifty years, Knowles has researched, designed, developed and delivered technologically advanced acoustic products that improve people's lives.
Like many other companies in a broad range of industries, we operate in a highly competitive global environment. In this regard, the key to our ongoing success is innovation - developing ever more sophisticated technologies that fulfill market needs and keep us at the forefront of our core markets.
Knowles welcomes vigorous competition in the global economy but that competition must be based on fairness. Fairness is also the basis of international law governing fair trade, intellectual property, capital formation and investment. In the end, there must be common rules of ethics and fairness if there are to be the benefits of international trade, economic development, improved standards of living, and closer socio-economic ties throughout the world.
It is within this overall context that Knowles has initiated a lawsuit in US Federal Court against American Audio Components (AAC) and a series of other defendants, which we allege have conspired to pirate successful manufacturing choices and procedures, production specifications, key employees, vendors and pricing.
The technology at issue relates to a silicon microphone which consists of a semiconductor element, a microphone diaphragm made of silicon produced using the Micro-Electro-Mechanical Systems, or "MEMS," process, and a unique and proprietary packaging system combining all in a single device.
Silicon microphone technology integrating MEMS is rapidly replacing the traditional microphone used in devices such as cellular telephones, digital cameras, PDAs, laptops and other consumer electronic devices on a global scale.
We have invested multiple millions of dollars and years of man hours researching and developing a technology deemed to be "disruptive" by the industry, and is a revolution in its field - a complete departure from prior technology - not simply an updated version or generation of the prior product. The MEMS microphone technology improves manufacturability, environmental stability and reliability, and reduces assembly costs while significantly reducing the size of the microphone.
In this case, AAC has engaged in a purposeful concert of actions to obtain the secrets of this new disruptive MEMS microphone technology amd its successful packaging. AAC has chosen to accomplish this not through fair competition or its own research and development. Rather, AAC has engaged in a devious plot to improperly obtain Knowles' trade secrets and proprietary information, and the targeting and poaching of key employees.
As alleged in the lawsuit, AAC has been so brazen in its efforts to secure MEMS technology and delivery systems that it has targeted and solicited key employees in the Knowles organization, openly advising them to blatantly disregard their non-compete and non-disclosure agreements. Utilizing a web of former Knowles employees and third parties in the U.S. and in China, AAC gained key trade secret and proprietary information regarding Knowles' successful formulas, design solutions, vendors and pricing.
The acoustics industry is fiercely competitive arena with rapid technological development and short product life cycles. Companies in this area strive to be the forerunners to research and development, patent creation and manufacturing technology and to effectively penetrate the market with new products. As a result, measures are taken by companies for purposes of protecting their research and development, trade secrets, confidential and proprietary information.
By going public with the information contained in this letter, it is our hope to provide further insight into the serious threats posed by piracy to international trade and the global economy. We ask you to join us in support of basic economic fairness not because of the damages we alone have experienced, but because of the longer-term threats posed to global economic vitality if such practices remain unchecked and unpunished.
If you would like additional detail or a copy of the actual complaint filed with the court, please contact John Corey at jcorey@greentarget.net.
Sincerely,
John Zei
President and Chief Executive Officer
Knowles Electronics, LLC
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