Toshiba sues South Korean rival SK Hynix for corporate spying

The civil suit, which Toshiba announced late Thursday, came as Japanese police took 52-year-old Yoshitaka Sugita into custody for allegedly copying sensitive research data for Toshiba's NAND-type flash memory and then handing it to its rival.

Sugita had formerly worked for Toshiba partner SanDisk which helps make the key technology used in smartphones and digital cameras and later passed it to his new employer Hynix.

He no longer works for the South Korean firm.

"Toshiba filed the suit on learning that a former employee of SK Hynix has been arrested in Japan for alleged criminal infringement of the Unfair Competition Prevention Act," it said in a statement.

Toshiba did not specify how much it was seeking in damages.

"The employee is alleged to have illegally taken Toshiba's proprietary technical information in 2008, and to have subsequently provided it to SK Hynix."

The Japanese company added that it is a business partner of the South Korean firm.

"However, the companies are also competitors in NAND flash memory, one of Toshiba's core technologies, and given the scope and importance of the misappropriated technical data involved, Toshiba has no reasonable option other than to seek legal redress," it said.

On Thursday, the Yomiuri newspaper reported Tokyo police began probing a suspected leak of Toshiba Corp technology to a South Korean company that relates to the top Japanese chipmaker's flagship memory chips.

The paper also said police had obtained a warrant for the arrest of a former engineer at a Toshiba-affiliated chipmaker who was suspected of improperly providing technical data to SK Hynix Inc.

This would mark Japan's first criminal investigation into a leak of advanced technology from the IT sector overseas, the paper said.

Yomiuri quoted investigators as saying the former employee was suspected of providing information relating to Toshiba's NAND flash memory technology to SK Hynix Inc after he started working at the South Korean company.

Written with inputs from AFP and Reuters