Market Overview

Lumileds Wins Jury Verdict of Liability for Intellectual Property Theft Against Elec-Tech International Co., Ltd., Donglei Wang, and Gangyi Chen

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US Superior Court of the State of California Imposes $66 Million in
Damages

On August 10, 2018, a jury of six men and six women rendered a verdict
in favor of one the world's leading LED companies, Lumileds LLC, based
in San Jose, finding that a Chinese competitor stole trade secrets
related to Lumileds core technology for making high power LEDs used in
flash phones, automotive headlights, and general illumination. The case,
Lumileds LLC v. Elec-Tech International Co., Ltd., Donglei "Tony" Wang,
and Gangyi Chen, Superior Court of the State of California, County of
Santa Clara, found the defendants liable for damages in intellectual
property theft. The jury awarded Lumileds $66 million.

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Mark Adams, Chief Executive Officer at Lumileds Inc. (Photo: Business Wire)

Mark Adams, Chief Executive Officer at Lumileds Inc. (Photo: Business Wire)

The jury concluded that ETI, Wang and Chen misappropriated Lumileds
trade secrets, took them to China, and used them to develop ETI's LED
technology. The award of $66 million is the amount of research and
development costs that the jury concluded ETI saved by using Lumileds
trade secrets rather than engaging in its own development.

"At Lumileds, we invest heavily in innovation to support our customers,"
said Mark Adams, Lumileds chief executive officer. "We will continue to
work with the judiciary, law enforcement, and appropriate government
agencies, to defend and protect our valuable intellectual property
rights."

The circumstances of the trade secret theft involved ETI's CEO,
defendant Wang, and a former scientist employed by Lumileds, defendant
Chen. Wang authorized a substantial payment to be made to Chen four
months before he left Lumileds to go to work for ETI in China,
effectively putting him on the payroll of ETI while he was working daily
with Lumileds most confidential trade secret technology.

Lumileds was represented in the matter by senior vice president, General
Counsel, Cheree McAlpine and outside lead counsel Brian Roche, partner,
Reed Smith LLP.

"We are pleased that the jurors recognized the clear intellectual
property theft by Chen, Wang and ETI, and the extent of the damages
caused by this misconduct," said Cheree McAlpine. "The precedent set by
today's verdict sends a clear message to the industry that intellectual
property will be guarded and enforced to safeguard the health of our
business."

About Lumileds

For automotive, mobile, IoT and illumination companies who require
innovative lighting solutions, Lumileds is a global leader employing
more than 9,000 team members operating in over 30 countries. Lumileds
partners with its customers to push the boundaries of light.

To learn more about our portfolio of lighting solutions, visit lumileds.com.

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