Firms sue to bar those who quit from taking ideas

May 30, 1993|By New York Times News Service

You've done it -- invented a recipe for the perfect chocolate-chip cookie. But your boss wants to keep making them the old-fashioned way for now. So you go into business for yourself, selling the cookies like, well, hot cakes -- until your old boss sues . . . and wins.

Why? Because, according to standards emerging from the growing number of lawsuits over the theft of trade secrets, you stole your own idea.

"If it's your invention or idea, it belongs to the employer if you were hired to come up with those kinds of inventions or those kinds of ideas," said Stephen L. Carter, who teaches intellectual property law at the Yale University Law School.

Such legal issues gained prominence this month when General Motors Corp. charged that a top executive hired away by Volkswagen had taken documents and computer disks bearing secrets.

Although lawsuits over the theft of intellectual property are uncommon in the auto world, other companies have fought for years over everything from the techniques of manufacturing musical instruments to secret recipes to make ordinary chicken taste fried.

With murky legal standards to guide them and increasingly fluid high-technology products to protect, companies deserted by valued employees are turning to the courts more frequently, experts said.

Spurned employers want to ensure that workers who leave do not take anything that could be considered a trade secret -- from their client lists to the ideas they develop to the notes they jot in their journals.

"This kind of drama is played out every day in Silicon Valley," said John C. Coffee, a professor at the Columbia University Law School, who has worked on trade-secret cases and written on the subject. "I don't think there are any areas of the law that are as rapidly exploding as intellectual property in the high-technology fields."

Brokerage houses have resorted to suits to try to prevent successful brokers from moving to competitors, and, in high technology and other scientific industries, such suits may become competitive tools to help a company keep its edge.

All that leaves workers like Peter I. Bonyhard worried about becoming slaves to a company simply because they soaked up information the company calls confidential.

In 1991, Mr. Bonyhard left International Business Machines Corp. for Seagate Technology Inc., where he went to work building the same sorts of components that he did at IBM. His former employer sued in Minnesota, where Mr. Bonyhard works at a Seagate plant outside Minneapolis, arguing that he would inevitably draw on IBM secrets.

IBM won an injunction that stopped Mr. Bonyhard from working on the devices for four months, but a higher court overturned it. If IBM wins its suit, he would be barred from working on those components for any company except IBM.

Increasingly, companies are insisting that new employees sign guarantees that if they quit, they will not use information they gain on the job in the service of a competitor.

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