A tiny Melville technology firm is suing two Taiwanese companies in federal court, charging that they conspired to steal the Long Island firm's innovations and block it from becoming a player in the rapidly growing world of e-readers.
CopyTele Inc. filed a lawsuit a week ago in the Northern District of California against AU Optronics Corp., E Ink Holdings Inc., and the two Taiwanese companies' American subsidiaries. AU is a major supplier of displays for Apple Inc.'s iPad Mini, while E Ink supplies displays for the Nook and Kindle e-readers.
CopyTele has seven employees, down from a peak of 25 to 30 in the 1990s, said chief executive Robert Berman.
A man who answered the phone at AU Optronics' California subsidiary on Thursday referred calls to the company's Hsinchu, Taiwan, headquarters. Executives there did not respond to emails seeking comment. A spokeswoman for Hsinchu-based E Ink, Jennifer Barlow, said E Ink declined to comment.
CopyTele laid out its allegations in court filings: AU signed agreements with CopyTele in 2011, promising to jointly develop new e-reader and television technologies. The e-reader technology would have gone head-to-head with E Ink's products. The television technology would have competed with LCD and plasma televisions.
However, AU made little or no progress on the joint venture, according to CopyTele's court filings. Then, in August 2012, AU announced it would sell its e-reader subsidiary to E Ink for $50 million, while improperly sublicensing the Long Island company's technology to E Ink, CopyTele charged. AU also pulled the plug on the planned television joint venture, according to court papers.
AU and E Ink's actions have financially crippled CopyTele, forcing it to lay off 15 employees last year, Berman said.