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Friday, January 29, 2010, 1/29/2010 10:15:00 AM

Ammoniated Beef - It's Trade Secrets are What's for Dinner

By Todd

In late December 2009 the New York Times published an article regarding the injection of beef with ammonia to remove potentially deadly E. coli bacteria from the beef. You can find that article here: The name of the company that pioneered this procedure is Beef Products, Inc.

The problem, according to the NYT, was that government and industry records obtained by The New York Times show that in testing for the school lunch program, E. coli and salmonella pathogens have been found dozens of times in Beef Products meat, challenging claims by the company and the U.S.D.A. about the effectiveness of the treatment. Since 2005, E. coli has been found 3 times and salmonella 48 times, including back-to-back incidents in August in which two 27,000-pound batches were found to be contaminated. The meat was caught before reaching lunch-rooms trays.

The article went on to state: "Presented by The Times with the school lunch test results, top department officials said they were not aware of what their colleagues in the lunch program had been finding for years. In response, the agriculture department said it was revoking Beef Products’ exemption from routine testing and conducting a review of the company’s operations and research. The department said it was also reversing its policy for handling Beef Products during pathogen outbreaks. Since it was seen as pathogen-free, the processed beef was excluded from recalls, even when it was an ingredient in hamburgers found to be contaminated."

Around the same time as The Times' piece went to print, attorneys at the Marler Clark law firm, based in Seattle, sent a formal request to Iowa State University seeking public records related to the research a University professor did on the safety of ammoniated beef. Beef Products then filed a suit seeking a court order against the university to prevent "public records" from being released, which filing you can read if you click on the title to this blog post. Beef Products claims that the Marler Clark request of Iowa State would force Iowa State to disclose trade secrets of Beef Products were the school to comply with the request.

The allegations in the legal pleading include:

"BPI engaged the services of Dr James S. Dickson PhD, in his individual capacity and not as an employee or representative of ISU, to perform certain testing and analysis relating to BPI's patented production and production processes. This included research and development activities, scientific testing in controlled settings with various pathogens that were intentionally introduced into selected specimens which were subjected to processing variations to affirm the integrity of existing BPI patented processes, assessing alternative processes, evaluating new processes, and seeking improvements in existing BPI processes and procedures. The work of Dr. Dickson was performed pursuant to a Non Disclosure Agreement."

The pleading goes on to assert:

"All the work performed pursuant to this independent contractor relationship, including testing, test results, evaluation, assessment, and/or analysis thereof, is proprietary, confidential, constitutes valuable trade secrets of BPI pursuant to law, and any records or documents created as a result thereof are the property of BPI and not ISU. A third party, has requested from ISU materials which would or could include some or all of the confidential, trade secret and proprietary information of BPI as set forth above. The disclosure of said information would disclose and divulge confidential trade secrets of BPI and would cause irreparable injury to BPI for which BPI has no adequate remedy at law. Such disclosure is prohibited by Chapter 22, Code
of Iowa."

We'll keep an eye on this one for you - but it will be important to learn: if the professor at Iowa State was Beef Products' contractor and was not acting in his capacity as an ISU agent in doing so, how did ISU come to obtain the "confidential, trade secret and proprietary information of BPI" such that they be in a position to produce it? Another way of asking this is - how did the trade secrets of a private company get into the possession of a public university with which Beef Products does not claim it has a confidentiality agreement? And, if that information did get into ISU's hands, as opposed to only Dr. Dickson's hands, how is Beef Products going to be able to prove that it used reasonable means to keep the trade secrets actually secret? The answer might lie in the additional allegation that "such disclosure is prohibited by Chapter 22, Code of Iowa." Our cursory research indicates that this is Iowa's public records law. We're certainly not conversant with that law, but the issue remains: how did a private company's trade secrets become a "public record" when the private company's NDA contract was with a state employee but not as a state employee and where no ancillary NDA contract was executed with the public entity (i.e., Iowa State University)?

This battle will be worth watching. Have a nice weekend.

Tuesday, January 26, 2010, 1/26/2010 02:55:00 PM

Christian Science Monitor: China Involved in Oil and Gas Cyber-Attack?

By Todd

Yesterday CBS, today it's The Christian Science Monitor. In this well-written piece, Mark Clayton reports on the oil and gas industry data breaches that are being investigated by the FBI. It is believed, but not proven, that the cyber-hacking originated in China.

Clayton writes: "The new type of attack involves custom-made spyware that is virtually undetectable by antivirus and other electronic defenses traditionally used by corporations. Experts say the new cyberburglary tools pose a serious threat to corporate America and the long-term competitiveness of the nation."

Clayton quotes an industry-hired computer security expert as saying: “We’ve had friends in the petroleum industry express grave concern because they’ve spent hundreds of millions of dollars finding out where the next big oil discovery will be. The attacker would be saving huge expenses for himself by stealing that data.”

The article goes on to report: "While most major nations, including the United States, are conducting Internet espionage, experts say two traditional US adversaries, China and Russia, are among the most aggressive and adept at carrying out such attacks. Both countries are known to have large communities of hackers and a deep base of computer security expertise."

“China, more so than Russia, has a large number of hacker clubs watched closely by the government,” says O. Sami Saydjari, a former Department of Defense employee who runs Cyber Defense Agency, a Wisconsin-based security firm. “These talent pools are all potential recruits for China’s professional cyberwarfare units. We strongly suspect they encourage their hacker groups to go out and attack foreign entities and get practice.”

Clayton says that: "Spying on other countries’ defense agencies and diplomatic corps undoubtedly remains a focus of Internet espionage. But cyberspies are increasingly targeting strategically important businesses, both because of the information to be gleaned and because their defenses are often easier to penetrate.

Google has said it found evidence of at least 20 companies in an array of US industries that had been infiltrated by attacks from China. Was the Chinese government involved? China adamantly says “no.” Whether it was or not, the Google breach reveals how pervasive the new espionage war is becoming and how sophisticated the tools are with which it is being waged."

This is a long piece but this is a synopsis of its interesting conclusions: "China would certainly be interested in this kind of data, experts say. With the country’s economy consuming huge amounts of energy, China’s state-owned oil companies have been among the most aggressive in going after available leases around the world, particularly in Nigeria and Angola, where many US companies are also competing for tracts."

“Knowing which one of those blocks is oil-bearing – and which to go for and which not – is clearly worth something,” says Paul Dorey, former chief information security officer at BP, the world’s third-largest oil company, and now a computer-security consultant in London. “If I was a foreign government, that’s the data I would want to get – and any analysis that reveals [a company’s] intention. Yes, that would be pretty valuable.”

Again, we'll keep posting on this topic as information becomes available. We strongly recommend this piece by Mr. Clayton to our readers interested in this evolving topic.

Monday, January 25, 2010, 1/25/2010 12:10:00 PM

CBS News: Chinese Are Targeting American Trade Secrets

By Todd

CBS News has published a report that is supported by oh-so-many blog posts on this blog: the Chinese appear to be committed to high-level industrial espionage targeting the secrets of successful companies throughout the world, particularly those in the United States. The Google report, according to some, is just the tip of the iceberg.

"This is not a Google story," said Peter Navarro, author of "The Coming China Wars." "It is a story about industrial espionage, coming from China, attacking American business and our economy." Navarro says the companies believed to have been attacked include Dow Chemical and Northrop Grumman.

"When they hack American business enterprises, it is a covert act of war on our economy at a time when their economy is growing at over 10 percent and we have a 10 percent unemployment rate," Navarro said. At a place where they battle hackers every day, the computer security company McAfee, George Kurtz says the attacks were sophisticated and precisely targeted, "designed to get in, cover its tracks and steal corporate secrets and get out."

And for the companies involved, those secrets are valuable. "Think about the amount of money they spend on [research and development] on a yearly basis -billions of dollars," Kurtz said. "Having trade secrets and potentially source code taken can be very damaging to them. "One of the huge drivers of Chinese economic growth over the last several decades has been the forced technology transfer from America to China," Navarro said.

We've been blogging about this topic for as long as we've been blogging: We've also blogged about cases involving China's alleged "863 program" recently:

This is not a story that's going away. For an interesting paper on this topic, see here:

Friday, January 22, 2010, 1/22/2010 11:54:00 AM

Motorola Sues Departed Executive Asserting Inevitable Misappropriation of Trade Secret Theory

By Todd

The Chicago Tribune is reporting that Motorola has sued former mobile phone executive, David Hartsfield, as a response to his resignation and new employment with Nokia, a Finnish mobile phone manufacturer. Motorola sued the case in Cook County state court and Mr. Hartsfield apparently removed that case to federal court.

Motorola's filing said that as a vice president in the mobile devices business, Hartsfield had "access to Motorola's most competitively sensitive information" and was responsible for phones using Code Division Multiple Access, or CDMA, technology. In the U.S., Verizon Wireless and Sprint use the CDMA standard.

Hartsfield resigned from Motorola effective Dec. 2, 2009, to become vice president of Nokia's global CDMA business, the court filing said. It called this move a "violation of various agreements" the executive had with his old employer. Motorola said that it was at risk of losing competitive information about CDMA strategy and marketing to Nokia and that Hartsfield's new job "inevitably will require him to use and/or disclose Motorola's trade secret information."

In a response filed Jan. 15, Hartsfield's attorney called Motorola's request "grossly inadequate." CDMA technology is an industry standard, not "secret proprietary information," and Motorola has not specified any wrongdoing by the executive, the filing said. The response also said the alleged non-compete clauses referenced by the company were buried in documentation about Hartsfield's stock options."We are confident we will show the court that Mr. Hartsfield has not disclosed any confidential information to his new employer," said Kevin O'Hagan of O'Hagan Spencer LLC, which represents the executive. "Mr. Hartsfield was not hired by Nokia for Motorola's so-called 'trade secrets' -- he just happens to be a young, talented executive."

Folks, that's how these cases kick start. A competitor hires an executive who they claim is a "talented executive" and the former employer claims that the employment represents a risk to their secret sauce. Motorola is presumably utilizing a computer forensic expert to examine all of Mr. Hartsfield's computers and electronic devices to find some evidence that he engaged in tomfoolery in the weeks and months prior to his departure. Mr. Hartsfield is presumably preparing affidavits explaining how Nokia made clear to him that no information he formerly learned at Motorola is welcome or necessary at Nokia and his use or disclosure of the same will constitute a ground for immediate discharge. The parties will ask each other to disclose documents and produce persons for depositions. And the hearing will reveal what they've found or what they haven't found.

We'll keep an eye on this one for you. Have a good weekend.

Thursday, January 21, 2010, 1/21/2010 10:53:00 AM

Bimbo Says Key Employee Threatens the Secrets of Making Thomas' English Muffins

By Todd

Bimbo Bakeries USA is the name of the entity that makes and distributes Thomas' bagels and english muffins as well as Entenmann's baked products. Chris Botticella has worked for Bimbo or its predecessors for approximately 20 years. Bimbo says Botticella knows all the recipes and manufacturing secrets of these products and says he is "one of less than ten people in the world who with full knowledge of how to produce Thomas' English Muffins." The complaint, linked above if you click on the title to this post, even mentions the secrets of the "nooks and crannies" in the english muffins and how to obtain the intended moisture levels.

Botticella apparently signed a confidentiality/non-disclosure agreement on March 13, 2009 when he was promoted to manage the California facility where Bimbo makes Thomas' English Muffins. And then, on January 4, 2010, Botticella announced his retirement, giving no indication he was actually planning on taking a position with Hostess.

As you can see from the complaint above, Bimbo is suing Botticella in Pennsylvania for anticipatory breach of the confidentiality/non-disclosure agreement AND inevitable disclosure of the Bimbo trade secrets he knows, including the manufacturing processes and recipes for Thomas' English Muffins. Bimbo says Botticella should be stopped by judicial decree.

It is important to note the venue of this case as being in Pennsylvania. Botticella's employment agreement apparently lays venue there. But Bimbo's arguments are ones that might not make legal sense in California, which is where Botticella resides and where he was performing the work for Bimbo and, logically, where the trade secrets reside.

We'll keep an eye on this one for you but we predict Botticella's legal response may involve a challenge to the venue of this case and his attorneys may study California's historical treatment of foreign jurisdiction injunctions and judgments that offend the public policy of California as represented in Business Code Section 16600 of that state. More soon.

Friday, January 15, 2010, 1/15/2010 02:07:00 PM

Amended Complaint in Starwood Hotels v. Hilton Hotels Corporate Espionage and Trade Secrets Case - Doh!!!

By Todd

We first covered the Starwood Hotels v. Hilton Hotels trade secret war here:

The Wall Street Journal is reporting that on Thursday Starwood Hotels filed an amended complaint in U.S. District Court, White Plains, N.Y., claiming that Hilton's misconduct reached the highest levels of the McLean, Va., chain's management, including its chief executive officer, Christopher Nassetta, and its head of global development, Steven Goldman. The complaint says that the alleged theft was known to and condoned by at least five of the ten members of Hilton's executive committee. A Hilton spokeswoman declined all comment. You can read the amended complaint here:

The amended complaint comes amid ongoing settlement discussions between the two companies. Those negotiations are complicated by the fact that Starwood wants more than monetary damages, according to the complaint. It has asked the court to appoint a monitor to oversee Hilton's future conduct. Further, it says it wants to impose a "penalty box" on Hilton that would prohibit it from developing its own luxury brand for a period of time, according to the complaint.

"This case is about restoring a level playing field for fair competition, not just substantial monetary damages," said Kenneth Siegel, Starwood's general counsel.

In February 2009, Hilton delivered to Starwood a batch of Starwood confidential documents, which included among other things details on development sites and marketing strategies. Hilton's general counsel attached a letter to the boxes saying that much of the material appeared "to be neither sensitive nor confidential" and were being returned "in an abundance of caution."

Thursday's filing alleges for the first time that Mr. Nassetta had knowledge of the documents about three months before Hilton began returning them to Starwood. In November 2008 Mr. Nassetta was informed that proprietary Starwood documents were placed on Hilton's computer server and were being used to develop Hilton's luxury and lifestyle brands, it claims.
That month, Hilton hired counsel to investigate the matter which resulted in its returning documents to Starwood, according to people familiar with the situation.

Starwood alleges Mr. Goldman, Hilton's development chief, used Amar Lalvani, a Starwood official, as a "corporate spy" for Hilton. According to the complaint, Mr. Lalvani while at Starwood provided Mr. Goldman with confidential information about hotel developers, including one interested in opening a W branded hotel in Thailand. Mr. Lalvani was later hired by Hilton.
"Here's an interesting one [developer]," Mr. Lalvani emailed, according to the filing. "This is going to be fun!!" A lawyer for Mr. Lalvani did not respond to requests for comment.

The 86-page complaint includes excerpts of emails between Hilton executives. In one, an executive discusses "Hiltonizing" the confidential Starwood documents and "sharing it with the Exec Group ASAP." The complaint says Hilton employees "scrubbed" the Starwood brand from documents so they could be routed freely among its managers. At least 44 Hilton managers were sent, received or copied on Starwood confidential documents, it says.
This is going to get uglier before it gets resolved. We'll be keeping an eye on it for you.

Wednesday, January 13, 2010, 1/13/2010 09:00:00 AM

Contempt, Jail, and Appeals in ClearOne Trade Secret Matter

By Todd

We'll start with a definition: contemnor - one who commits an act in contempt of a court order, standard or instruction.

Now, having established that, we'd also respecfully suggest that one does not want the following words written about them by a judge (click on link above to the read the entire order):

"Frankly, given the history of this litigation, the contemnors’s intentional failure to appear to be cross-examined about their conclusory statements, and the court’s findingthat both Mr. Bowers and Dr. Yang have lied under oath during this case, the court is not persuaded by the self-serving declarations they have submitted. Essentially, they have provided nothing . . . ."

We covered this case before here: You'll recall the case that was presented to a jury in October and November 2008. The case was against Biamp Systems Corporation and a group of defendants sometimes termed the "WideBand Defendants," which group consists of WideBand Solutions, Inc.; three of WideBand's principals - Dr. Jun Yang, who was a former ClearOne employee, Andrew Chiang, who was previously affiliated with an entity that sold certain assets to ClearOne and Lonny Bowers; and Versatile DSP, Inc. And they lost pretty bad.

Anyway, the court issued an ongoing injunction order that stopped the Yang and Bowers defendants from continuing to repackage certain products. Well, according the court and ClearOne - they have not stopped. And now the judge has issued bench warrants and will have them incarcerated until they prove that they've stopped.

We'll keep an eye on this one. It is believed that Dr. Yang and Mr. Bowers intend to take this issue to the United States Court of Appeals for the Tenth Circuit. Good luck - you have been found by a respected federal judge to have lied under oath in the evaluation of whether you are in contempt of a court order. That's at least one strike against you as you move on up.

Monday, January 11, 2010, 1/11/2010 07:38:00 PM

Money Management Firm Says Former Executive, Jeffrey Gunlach, Stole Trade Secrets and Left Porn and Pot

By Todd

The Los Angeles Times is reporting the bitter split between Los Angeles money management giant TCW Group and former executive Jeffrey Gundlach turned nastier Thursday, as TCW sued Gundlach, alleging that he stole confidential information and used it to launch a rival firm.

Gundlach, ousted as investment chief of $110-billion-asset TCW on Dec. 4, schemed for months with top lieutenants to exit the firm with vast amounts of proprietary data, the lawsuit asserts.

TCW also sought to portray the 50-year-old Gundlach as unfit to remain a company officer. The firm said it found marijuana, pornographic DVDs and magazines and "sexual devices" in his TCW offices on the day he was terminated.Gundlach's new firm, DoubleLine Capital, quickly fired back, asserting that TCW's suit had no merit and accusing the company of resorting to "gutter" tactics. DoubleLine said it planned to file a counterclaim against TCW.

The public divorce has stunned L.A.'s normally low-profile money management industry. TCW's suit, filed in Superior Court in Los Angeles, reflects the high stakes for the 38-year-old company: Gundlach, considered one of the country's sharpest investors in complex mortgage-backed bonds, could drain away TCW's assets if many of the firm's big investors opt to move their accounts to DoubleLine.

Already, about 40 of Gundlach's 65 TCW investment team staffers have defected to DoubleLine, which set up shop Dec. 14. After firing Gundlach, TCW suffered heavy cash outflows from its flagship mutual fund, TCW Total Return Bond, which he had managed. The fund's assets fell to $6.2 billion by Dec. 31 from $12 billion just before Gundlach was fired.

In its suit, TCW claims damages of more than $200 million and seeks to impose a "constructive trust" on DoubleLine, claiming any assets and profit.When it terminated Gundlach, TCW said it did so because he had been threatening to leave and take key personnel with him. The company the same day announced that it would buy a smaller L.A. money management firm, Metropolitan West Asset Management, to take over Gundlach's duties.

Within a few days of when he was ousted, Gundlach vowed to quickly return to the money management business by forming his own firm. TCW's 39-page suit asserts that that had been Gundlach's plan for months, even though, the suit says, he had assured the firm throughout the fall that he had no intention of leaving."The sudden appearance of [DoubleLine] has been hailed by the financial press as a testament to Gundlach's organizational skill and financial savvy," the suit says. "In fact, DoubleLine is entirely the product of defendants' theft of TCW property, fraud and breach of fiduciary duty."

TCW alleges that Gundlach, working with other TCW staffers who have joined him at DoubleLine, began conspiring last year to copy the equivalent of 9 million pages of TCW documents related to its trading systems, client information, documentation on 20 million mortgages and other data. On Sept. 30, a Gundlach lieutenant began working with a commercial real estate agent to find 24,000 square feet of office space, the suit says.

"In e-mails, [Gundlach] declared 'war' on TCW and solicited TCW employees to pledge their allegiance to him," the suit says. "As defendants' conspiracy developed, co-conspirators (and Gundlach himself) began to refer to Gundlach in e-mail exchanges as 'The Godfather' or 'The Pope.' "The suit names three DoubleLine employees besides Gundlach and includes 50 additional unnamed defendants, presumably DoubleLine employees to be identified later.

Gundlach told The Times on Dec. 14 that any TCW information on the private computers of TCW employees who joined DoubleLine had been given back to the company. In its statement Thursday, DoubleLine said TCW's suit was "a blatant attempt to damage DoubleLine's business."The suit, which makes only a brief mention of marijuana, pornography and unnamed sexual devices allegedly found in Gundlach's TCW offices, says that his "possession of such inappropriate materials in TCW's office premises was in blatant disregard to TCW's clearly stated employment rules and regulations.

"The allegations are intended to show that TCW will pull out all the stops to prevail in the battle to protect its franchise, said Michael Abelson, a partner at Los Angeles law firm Abelson Herron, which isn't involved in the case."It's meant to send a message to anyone who would even think of assisting him that they'll drill down to the nth level in their background and personal history," he said. But those allegations have little legal relevance, Abelson said. "I'm not aware of any law against possessing sexual devices or hard-core magazines," he said. "It's left purposely vague to let the reader's imagination run wild and to think the worst of Mr. Gundlach."

Gundlach, a math whiz who joined TCW as a bond analyst in 1985, became one of the firm's stars over the last decade, attracting tens of billions of dollars in assets from pension funds and other investors eager to tap his expertise. The firm named him chief investment officer in 2005.TCW's suit says Gundlach earned $134 million in the last five years, including $40 million in 2009.Early last year, rumors began to circulate on Wall Street that Gundlach was unhappy at TCW. The firm's parent, French banking titan Societe Generale, had announced that it was planning to get out of the money management business and expected to sell or spin off TCW within five years.Gundlach has publicly acknowledged that he became upset about TCW's direction and wanted to have more say about the firm's future. But he has insisted that he never threatened to leave TCW.

For the trade secrets blog record, we agree with Mr. Abelson's comments above. How the allegations about sex toys and marijuana advance the trade secrets ball, we don't know. It could backfire on TCW if a judge doesn't see a legal pleading as an appropriate vehicle for airing dirty laundry. But that's not always what employee defection cases are about now, are they?

Interesting post-script: see Mr. Gundlach's letter to the world here: Pretty solid job using TCW's energetic attack as an counter-attack and marketing bonanza. Here's just a taste of this well-written response:

A second deeply disturbing element of TCW’s actions has been its invasion and searching of locked drawers in my office at TCW’s headquarters in downtown Los Angeles and of a small personal office I kept in Santa Monica. I personally paid the rent and all other expenses for the operation of this office.

After seizing these offices, TCW refused to allow me to collect my personal possessions, and the salacious disclosure in TCW’s lawsuit of certain items apparently taken from there is a transparent attempt to embarrass me and harm my business. While these actions will no doubt be subjects of litigation, suffice it to say that I had every expectation of privacy in these spaces, which stored vestiges of closed chapters of my life.

Notwithstanding TCW’s scorched earth legal policy, I am certain that no employee of TCW, past or present, friend or foe, can honestly say that they ever had any experience with me, either in the office, on the road or in any meeting, in which there was any improper activity consistent with the innuendos, smears and gross distortions to which TCW has shamelessly subjected me in its lawsuit.

This one, as we sometimes say, is going to be a barn-burner. Stay tuned.

Thursday, January 07, 2010, 1/07/2010 09:52:00 AM

Medical Board Sues Test Preparation Company for Theft of Trade Secrets - The Physician Certification Test Questions!

By Todd

The Philadelphia Inquirer is reporting that the American Board of Internal Medicine announced yesterday that it has filed a suit against a North Jersey company that provided test preparation for doctors.

The suit, alleging copyright infringement and theft of trade secrets, accuses the company of stealing test questions with help from doctors taking the certification tests.

The suit was filed in December in U.S. District Court for the Eastern District of Pennsylvania against Arora Board Review in Livingston, N.J., its principal Rajender K. Arora, and Anise K. Kachadourian, a practicing physician. The court entered a preliminary injunction against the defendants on Dec. 23.

The company's Web site was down and "undergoing changes" yesterday. Arora and Kachadourian could not be reached for comment.

The American Board of Internal Medicine administers exams that evaluate doctors' knowledge and skills. While doctors can practice medicine without them, many hospitals and insurance companies require that doctors be board-certified, said Hara Jacobs, the ABIM's lawyer. The tests are protected by copyright law.

Physicians paid between $1,000 and $1,495 for Arora Board Review courses.

U.S. Marshals, ABIM security, and attorneys seized "infringing" materials at Rajender Arora's home last month, the ABIM said. In its suit, ABIM estimates that the company "stole, copied and disseminated" about 1,000 test questions, Jacobs said.

The suit contends the company obtained questions from doctors who took the test. Arora took and failed the exam seven times and Kachadourian took it and failed 10 times, Jacobs said.
She said she could not divulge how ABIM plans to deal with doctors who aided the company.

We have some doubts whether test questions, obtained from test takers, constitute trade secrets under any commonly accepted definition of that term. But the allegation is an interesting one and we'll keep an eye on this one for you.

Monday, January 04, 2010, 1/04/2010 06:50:00 PM

"Standing" to Bring Trade Secrets Case to Trial? California Appellate Court Reverses in Nasty, Brutish Marvell Semiconductor Case

By Todd

This was, you might recall, the wacky case in which the general counsel of Marvell Semiconductor Inc. and two of his colleagues phoned the legal chief of a rival company, Jasmine Networks Inc. The call went straight to voicemail, so the Marvell attorney left a message and hung up. At least, he thought he did. Though the Marvell counsel and pals didn't know it, the Jasmine lawyer's voicemail was still taping them as they continued to talk on speakerphone – allegedly about how they were stealing their rival's trade secrets.

Then, after years of litigation, we blogged about the case again: The trial court bought Marvell's argument that Jasmine didn't have standing in the case because they sold their IP rights after the filing of the suit. The case was dismissed.

Well, like Jack Nicholson in "The Shining" - "here's Johnny!" The trial court's "standing" decision was reversed by the appellate court. The decision and opinion is linked at the top of the page if you click on the title of this blog post. Read it - the court concludes the trial court erred and it is no requirement that one owns the trade secrets at the time of the trial to be able to go to trial seeking damages allegedly suffered due to misappropriation of those secrets at one time.

We'll keep an eye on this one for you. We've always wondered how one would defend that taped telephone call.
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