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SpaceX Accused of Poaching Engineers

SANTA ANA, Calif. (CN) - A computer chip manufacturer accuses Elon Musk's space transport company SpaceX of raiding its employees to gain proprietary information in a lawsuit filed in Orange County Superior Court.

Broadcom is based in Southern California and operates as one of the world's top semiconductor vendors.

The company says SpaceX violated nondisclosure agreements and poached its top engineers "to procure a family of sophisticated, customized computer chips without bearing all of the research and development costs inevitably involved in creating such chips," according to the complaint filed March 23.

SpaceX refutes the Broadcom's claims, saying the engineers in question approached SpaceX and asserting the company will not pursue the computer chip design Broadcom proposed.

"SpaceX has no intention of executing to the content presented in the Broadcom proposal," SpaceX said through a company spokesman.

Space Exploration Technologies Corporation, more commonly known as SpaceX, was co-founded by futurist and entrepreneur Elon Musk with the goal of reducing space transport costs so humankind can eventually colonize Mars.

In 2014, SpaceX approached Broadcom expressing interest in contracting the semiconductor vendor to design and construct a series of advanced computer chips necessary to accomplish an undisclosed project.

Broadcom says in its complaint that SpaceX was particularly interested in radio frequency engineers who could work on emerging technologies not yet widely known in the semiconductor industry.

In response, Broadcom says it established a team of its highest-performing engineers to work exclusively on the project, investing hundreds of hours into the development of an array of technology solutions for Space X in the hopes it could secure a multi-year contract to provide computer chips to the space transport company, according to the complaint. The two companies signed a nondisclosure agreement so they could freely exchange ideas as they worked toward an agreement.

In 2015, Broadcom put a cost proposal before SpaceX, which balked saying costs were too high. Broadcom revised their budget but SpaceX continued to maintain costs were exorbitant, Broadcom's complaint says.

SpaceX refutes this version of events, saying they rejected the contract because they deemed it insufficient.

"Last year, SpaceX spoke with a number of suppliers regarding potential opportunities to support SpaceX operations," a SpaceX spokesman said. "SpaceX reviewed Broadcom's proposal, but ultimately found it lacking and rejected it."

However, Broadcom claims SpaceX used the deal as a means of identifying the chip manufacturer's top talent - and proceeded to poach them, the complaint says.

Broadcom's co-founder and chief technology officer Henry Samueli met with SpaceX CEO Elon Musk in October 2015 in attempts to solidify an agreement, at which time Musk insisted Broadcom keep its "A-team" on the project, according to the complaint.

But even as Samueli and Musk were meeting, other SpaceX representatives were attempting to uncover the identities of the "A-team" engineers working on the Space X project, Broadcom says in its complaint.

Five Broadcom engineers - all of whom worked on the SpaceX project - resigned their positions with the company effective March 11, and refused to disclose their new employer, according to the complaint.

Broadcom says SpaceX confirmed they hired the five engineers on March 9, saying nothing prevented them from hiring other Broadcom engineers.

For its part, SpaceX says the Broadcom engineers - all named as defendants in Broadcom's complaint - approached them.

"SpaceX did not pursue or lure engineers from Broadcom," a SpaceX spokesman said. "On the contrary, these engineers reached out to SpaceX anticipating significant layoffs at the Broadcom Irvine location."

Broadcom is seeking damages related to the violation of the nondisclosure agreement and unfair competition. The company also says its five former engineers have violated their confidentiality agreements by seeking to divulge trade secrets.

Broadcom is also seeking temporary and permanent injunctions to bar SpaceX from putting the engineers to work and from poaching any of its other employees.

The company is represented by Daniel Pyne of Hopkins & Carley in San Jose, Calif.

Broadcom did not return an email seeking comment by press time.

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