Atul Malhotra, 42, faces up to 10 years in prison and a $250,000 fine after pleading guilty to one count of theft of trade secrets.
Malhotra was a director of sales and business development in IBM’s Global Services Division for nearly a decade, from 1997-2006. He obtained confidential pricing info regarding IBM’s products and materials, then, two months later, took a job as a Vice President with Hewlett-Packard Co. Shortly after arrival at HP, he emailed the information (“good stuff,” he called it) to two of his superiors, professing that it would give HP a competitive edge.
HP immediately fired Malhotra and turned the information over to authorities.
While HP’s behavior is admirable, trade secret owners cannot expect all companies to act so nobly. In an earlier post, we detailed the (Illinois) requirements that must be satisfied in order for information to be deemed a trade secret. Once trade secret status is acquired, the legal recourse available to the owner increases dramatically, but that may still be little consolation if the trade secret is nevertheless stolen and disclosed to a competitor or the public.
The need to protect confidential information is not relieved once a trade secret is established. Trade secret owners should constantly be ensuring the continued secrecy of the information through confidentiality agreeements with their employees and anyone else who might come in contact with the information.
AP story here.