Tuesday, May 16, 2006, 5/16/2006 09:03:00 AM

Hand-Shake Deals -- Trade Secrets and Other Problems

From Stereophile (yes, Stereophile!), a story about two individuals -- one a prominent sound engineer, the other, the money guy -- who formed a business to manufacture high-end speakers on a hand-shake. And then their troubles began. . . .

First, the engineer's former employer claimed he was using their trade secrets, specifically "the identities of the companies they buy parts from." Although a weak case, the new company had to settle for $50,000.

Things went downhill from there with the whole thing crashing in competing recrimnations between the two owners.

It's a good cautionary tale from author John Marks.

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