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Broadcom in SpaceX dispute

Semiconductor and chipset developer Broadcom has started legal proceedings against Elon Musk’s rocket-company SpaceX, alleging that Musk’s business has violated NDA’s that existed between the two companies and SpaceX is further accused of “raiding its employees” in order to gain proprietary information.

The action has been filed in Orange County Superior Court, and commenced on March 23rd.

Broadcom says that SpaceX violated nondisclosure agreements and poached its top engineers “to procure a family of sophisticated, customized computer chips without bearing all of the research and development costs inevitably involved in creating such chips,” according to the complaint.

SpaceX denies the claim, and says that the Broadcom engineers approached SpaceX and in any case SpaceX would not be pursuing the chip design proposed by Broadcom.

The two companies have had a relationship in place since 2014 when Broadcom was asked to design a series of advanced components for an undisclosed project. The filing explains that the design called for radio frequency engineers to work on the project. Broadcom alleges in its action that it assigned a team of its highest-performing technicians to work exclusively on the project, and that an NDA was signed between both parties.

Broadcom says that it proposed a fee to SpaceX in 2015, which was rejected, and then re-costed.

This sequence of alleged events is disputed by SpaceX which says it found the Broadcom proposal lacking, and rejected the concept.

Broadcom’s action seeks damages related to the violation of the nondisclosure agreement and unfair competition. Broadcom says its five former engineers, named as defendants in the action, have violated their confidentiality agreements by seeking to divulge trade secrets.

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