International Rectifier Corp. lost its battle with ousted chief executive Alexander Lidow when a Los Angeles federal judge dismissed its lawsuit over alleged theft of trade secrets.
The El Segundo maker of power management chips filed the suit in September, alleging that Lidow engaged in an ongoing criminal enterprise , also known as a racketeer influenced and corrupt organization, or Rico , by stealing information and intellectual property related to the company’s $60 million secret research. The judge dismissed the suit on Monday.
International Rectifier claimed that Lidow devised a plan to steal IR’s trade secrets, and then recruited former researchers and sales executives to help him launch a competing company.
Federal judge Manuel Real threw out International Rectifier’s suit, ruling that the company failed to properly plead its claim that Lidow, and the other former IR employees, where involved in a criminal enterprise.
“We are happy the court recognized they hadn’t pleaded a Rico claim,” said Robert Sacks, the L.A. litigator who represented Lidow in the case.
Graham Robertson, a spokesman for International Rectifier, said the company is evaluating its next move in its battle with Lidow.
“We are reviewing the options,” Robertson said.
International Rectifier’s tangle with Lidow is just the latest in a series of problems that have plagued the company, whose chips are in washing machines, laptop computers, and military satellites.
In 2007, Lidow resigned as chief executive after an investigation by an audit committee revealed that accounting irregularities with International Rectifier’s Japanese subsidiary cost the company about $117 million, and forced IR to restate two years of earnings. At the time, IR did not specify what led to Lidow’s resignation.