Intellectual Property Law

Former IBM exec Atul Malhotra pleaded guilty to the theft of IBM’s trade secrets according to this article.

Key graphs:

In pleading guilty, Malhotra admitted that on March 15, 2006, while employed at IBM, he requested and received confidential information concerning IBM Global Services, CC Calibration Metrics. The trade secret information, marked confidential on each page, included data concerning product costs and materials that IBM used to compete in the marketplace. In providing the requested information, a pricing coordinator at IBM Global Services directed Malhotra not to distribute the information due to its sensitive nature.

In May 2006, Malhotra became a vice president of imaging and printing services for HP. According to plea documents, shortly after starting in his new position at HP, Malhotra shared IBM trade secrets with his superiors. On July 25, 2006, Malhotra sent an e-mail to an HP senior vice president with the subject, “For Your Eyes Only,” and attached the trade secret information for which he is charged with sharing. Two days later, on July 27, 2006, he sent an e-mail to another HP senior vice president with the subject, “For Your Eyes Only - confidential,” and attached the same trade secret information. The court documents also reveal that in the e-mail message, Malhotra noted that knowledge of this information would help specific HP sales teams better understand their competitors’ goals as the teams determined pricing for prospective deals.

They don’t get much easier than that. However, unsaid in the article is that IBM most likely had an excellent trade secrets protection plan in place for the dissemination of any information they considered to be trade secret. Further, it’s clear that their employees were well trained as the article notes that the pricing coordinator directed Malhotra not to distribute the information. All of this work beforehand made the case against Malhotra so strong that he was forced to plead guilty. Malhotra faces a maximum of 10 years in prison, a fine of $250,000 and a three-year term of supervised release. Crime doesn’t pay.