By Robin Cleary (San Francisco)
Double-checking the locks on your car; re-opening the door on the public mail box after mailing a letter; and re-pressing the receiver button on your speakerphone after finishing a conference call—all extra precautions to preserve privacy, though not always viewed as essential by many. But in Marvell Semiconductor’s case, a little extra diligence by its former executives would have saved it years of headaches and legal expenses. After nine years, the trade secret misappropriation case filed by Jasmine Networks against Marvell is finally underway in Santa Clara Superior Court. Jasmine alleges that Marvell breached a nondisclosure agreement and stole its intellectual property. Jasmine claims lost business worth $80 million to $100 million.
At the heart of Jasmine’s case is a voicemail left in August 2001 by Marvell’s former general counsel for Jasmine’s legal and business affairs director. In the voicemessage, Marvell’s general counsel asked Jasmine’s in-house counsel to return his call. Marvell’s counsel, however, inadvertently failed to hang up the phone, and his subsequent conversation with Marvell’s in-house patent attorney and vice president of engineering was recorded.
According to reports, a transcript prepared by Jasmine quotes Marvell’s former general counsel, saying on the voicemessage "Sehat doesn’t go to jail. [Marvell vice president of business development] Manuel [Alba] might go to jail." Later, another company officer says: "If we took that IP on the pretense just evaluating it, and put it in our product …"
Jasmine’s trial counsel characterize the voicemail as evidence that Marvell conspired to steal its trade secrets. Marvell counters that the voicemail is simply speculation by Marvell executives about what could happen and that, regardless of how the voicemail is characterized, there was no misappropriation because none of Jasmine’s technology was used in any of Marvell’s product. Although Marvell was initially successful in obtaining a preliminary injunction to prevent the use or disclosure of the voicemail, the Sixth District Court of Appeal reversed the order on the grounds that the attorney-client privilege had been waived and that the voicemail fell within the crime-fraud exception to the attorney-client privilege.
Whether the infamous voicemail was a confession or mere speculation now appears to be a question for the trier of fact to decide. We will provide an update to let you know what the jury decides. In the meantime, remember to hang up your phone after you leave a voice message.