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It’s a long way from New Jersey to Silicon Valley, but two lawyers from Brielle have spent part of the past eight years chasing down corporate pirates nestled in California’s high-tech corridor. Their efforts, along with an FBI investigation, paid off on Sept. 3, when the infractors were sentenced for conspiring to steal blueprints and selling bootlegged semiconductor parts as their own. Armed with those criminal convictions, James Maggs and John McDermott III, partners of Maggs & McDermott, can proceed with a civil suit to attempt to recover what their client lost. The client is M.E.C. Technology Inc., a maker of replacement parts for the semiconductor industry. The Toms River company used a costly reverse engineering process to produce substitutes for parts originated by companies like Applied Materials of Santa Clara, Calif. In late 1994, a machine shop that supplied M.E.C. said that a new customer, Semiconductor Spares, had sent it engineering drawings that looked like altered Applied Materials originals. The supplier gave M.E.C. copies of the drawings. M.E.C. gave the copies to Applied, asking it to confirm ownership, while Maggs and McDermott drafted a complaint against Semiconductor. When Applied did not respond, Maggs and McDermott gave them a deadline by which they would file. That is when they heard from Applied’s lawyer, Gary Weiss, a partner with Orrick Herrington & Sutcliffe in Menlo Park, Calif., who said Applied had given the documents to the FBI and if M.E.C. did not hold off on the filing, it would blow the lid off the FBI investigation, according to Maggs. So McDermott and Maggs waited. On Feb. 22, 1995, the FBI raided Semiconductor’s offices, removed its files and padlocked its doors. A day later, M.E.C. sued in federal court in Trenton, N.J., alleging unfair competition, false advertising and other claims. In 1996, another suspected bootlegger was added as a defendant: McDowell & Co. of San Carlos, Calif. M.E.C. settled with Semiconductor in early 1997 for an amount Maggs calls confidential but “extremely favorable.” Clifford Lange, a solo practitioner from Murray Hill, who represented Semiconductor, declines comment. In March 1997, Judge Garrett Brown Jr. dismissed M.E.C.’s claims against McDowell for lack of personal jurisdiction. Maggs says he and McDermott were pondering whether to file against McDowell elsewhere when an unexpected telephone call handed them a smoking gun. The call, in early June 1997, came from Ronald Skolek, a McDowell sales manager in Richardson, Texas. Skolek told how within days of the raid on Semiconductor, McDowell president Rusty McDowell asked Skolek and vice president of operations Herbert Reese to start shredding documents, out of fear the company was next on the FBI’s list. Maggs flew to Texas, took Skolek’s statement and returned later with McDermott and a court reporter to get the story under oath. According to Maggs, Skolek had kept copies of crucial documents and gave him three sets of drawings: originals from Applied and other makers; marked-up copies to show what changes were needed to disguise their provenance; and final versions that passed themselves off as McDowell drawings. Maggs gave the papers to Applied and the FBI. He and McDermott then brought on Patton Boggs of Dallas as local counsel and civilly sued the McDowell company, along with 10 principals and employees in the Northern District of Texas in September 1997. For the next few years, Maggs and McDermott traveled to California and Texas for motions, depositions, conferences and meetings, while providing information to the FBI. McDowell and Reese were indicted in 2000, and the next year, a federal judge in Texas stayed the civil suit until the criminal matters in California were resolved. That has now occurred with the McDowell’s sentencing, says Maggs, who plans to move to reopen the case , M.E.C. Technology v. McDowell & Co. The criminal convictions will put “some wind in the sails” of the civil case, he says. For a while, says McDermott, the case appeared to be a “bit of a David and Goliath situation.” After the Brown dismissal, things looked bleak and the two plaintiffs lawyers knew they would be up against a lineup of high-powered adversaries if they pursued the case. But the Skolek drawing showed that “what McDowell was doing was beyond [M.E.C.'s] worst fears” and empowered the company to go forward, says Maggs. M.E.C. had a lot at stake. A competitor with access to the original blueprints could turn out replacement parts more quickly and cheaply than M.E.C., which relied on reverse engineering. Rusty McDowell and the company were convicted by a jury in November 2002 of conspiring to steal the blueprints and selling bootlegged parts as their own. A federal judge in California sentenced McDowell on Sept. 3 to 24 months in prison and 12 months’ community confinement and fined him $25,000. The company was placed on three years’ probation and fined $750,000. Reese pleaded guilty to related charges in 2002. David Biehl, president and owner of Semiconductor Spares, pleaded guilty in 1997 to conspiring with employees of Applied and other original parts makers to use their proprietary information. He was sentenced to 31 months in jail, three years of supervised release and $100,000 in restitution. Applied Materials’ own lawsuit against McDowell for misappropriation of trade secrets, copyright infringement, breach of contract and fraud settled in 2000 for an undisclosed amount. The office of the U.S. Attorney for the Northern District of California declines comment on the role played by Maggs and McDermott, citing a policy not to disclose matters that are not part of the public record of a case. Clark Will, a partner with the Dallas firm of Quilling Selander Cummiskey & Lownds, who represents McDowell & Co., did not return a call seeking comment.

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