Verigy says court finds competitor in contempt

Microchip testing company Verigy Ltd. said Tuesday that a federal court has found a former employee and his chip testing startup in contempt of court for violating a temporary restraining order, and extended a preliminary injunction.

Verigy said it employed Romi Mayder launched a startup chip design testing business that was based on Verigy's patents. Mayder was employed by Verigy a systems designer until Sept. 2006, the company said.

The U.S District Court for Northern California found that Mayder's product, Flash Enhancer, was "substantially based upon Verigy's trade secrets," Verigy said.

The court granted a restraining order last August against Mayder, his brother, Wesley Mayder, Silicon Test Systems Inc. and Silicon Test Solutions LLC.

The preliminary injunction issued in February prohibits the defendants from selling, licensing, distributing, transferring or marketing Flash Enhancer for five months. As sanction for the contempt of court ruling, the court extended the injunction by another four months and ordered the defendants to pay Verigy's lawyer fees in related to the contempt motion, Verigy said.

Mayder did not immediately return a call seeking comment.

Verigy shares rose 56 cents, or 2.2 percent, to close at $25.75.