In 1996, 1999 and 2000, plaintiff UniRAM Technology Inc., Mountain View, entered into non-disclosure confidentiality agreements with the Taiwan Semiconductor Manufacturer Corporation (TSMC), Taiwan. The agreements stipulated that UniRAM would share certain design information about embedded DRAM semiconductors that it had designed in order to conduct a dialogue between the two companies regarding the potential for mass production of the semiconductors.

As the designs were being revealed to TSMC it entered into an agreement to manufacture embedded DRAM semiconductors designed by one of UniRAM's competitors, Monolithic System Technology (MoSys), Sunnyvale.
UniRAM sued TSMC and MoSys for misappropriating its trade secrets and breaching
its contract, alleging that TSMC disclosed its semiconductor design to MoSys so that MoSys could incorporate the design into plans it had developed for its own semiconductor. Prior to trial, UniRAM settled with MoSys for $2.4 million.
Plaintiff's counsel argued that TSMC had a more extensive business relationship with MoSys and it was more advantageous for TSMC to reveal UniRAM's design to MoSys than for it to simply purchase the design from UniRAM for mass production. Counsel argued that the only reason that TSMC discussed UniRAM's semiconductor designs with it was so that it could reveal the information to its competitor and incorporate UniRAM's tapeout into MoSys' semiconductor blueprints. Plaintiff's counsel noted that MoSys owed TSMC $30 million before it supplied TSMC with its own semiconductor design and that TSMC held stock MoSys.

Plaintiff's counsel argued that TSMC initially reviewed UniRAM's embedded DRAM semiconductor tapeout in Dec. 1996, after the first non-disclosure agreement was entered. At that time UniRAM revealed its design to make memory using a standard logic manufacturing process. According to plaintiff's counsel, prior to this time, TSMC was only able to create embedded DRAM semiconductors by placing memory and logic aspects of the semiconductors on separate chips but UniRAM's tapeout displayed a method whereby the two aspects of embedded DRAM could be on the same chip. Counsel asserted that once TSMC gained that information it revealed it to MoSys and MoSys advanced its research in a
totally different direction, having UniRAM's embedded DRAM semiconductor trade secret as its guide.

TSMC's counsel contended that the company was the most trusted agent in the semiconductor business for adhering to and protecting its partners' confidentiality agreements. TSMC contended that MoSys had already been designing methods for making memory, using a standard logic manufacturing process, when it reviewed UniRAM's tapeout in 1996, and that it never disclosed the tapeout to MoSys. Counsel added that MoSys independently designed its own embedded DRAM semiconductor in 1999, and that MoSys' semiconductor design had features that weren't included in UniRAM's design.

Plaintiff's counsel further argued that UniRAM was entitled to $19 million in reasonable royalty damages because that would likely have been the amount that TSMC would have paid UniRAM had it purchased the rights to its semiconductor design.
Defense counsel countered UniRAM's reasonable royalty figures by arguing that $2 million would have been a more likely purchase figure for UniRAM's design.
The defense also contended that the $178 million in profits presented by plaintiff's counsel was excessive because it didn't factor in TSMC's $100 million in fixed costs associated with bringing any semiconductor design to market. Counsel asserted that, once TSMC's profit was accordingly reduced to approximately $85 million, UniRAM was entitled to recover only 10 to 25 percent of that figure for unfair enrichment, as the memory aspect of a semiconductor was only 10 to 20 percent of the total product that TSMC brought to the market.