Marvell Gets Off the Hook
Nine years ago, Marvell Technology Group Ltd. (Nasdaq: MRVL) officials left what might be the most embarrassing voice mail in Silicon Valley history. But at least they can say they didn't admit to trade-secret theft. (See Jury Sides With Marvell.)
The company announced this morning that a jury found Marvell not guilty of misappropriating trade secrets from Jasmine Networks, a startup that went belly-up in 2002. (See Jasmine Networks: Disconnected.)
The case has been famous for the subtle legal lessons involved, such as: Don't admit to technology theft out loud. Or, at least avoid references to bribing people. Better yet, hang up the damn phone.
In August 2001, Marvell's then-current general counsel and a couple of other executives were sitting around a speakerphone for a call with Jasmine's general counsel. Marvell and Jasmine were negotiating a deal, possibly a technology sale, and there were some points to discuss. The Jasmine lawyer wasn't in, so Marvell's counsel left a voice mail.
And then, apparently, he failed to hang up.
Fortune, in 2001, claimed to have a transcript of what came next:
- "Yeah, but you know the problem is so if they're dumping it into Tigo [presumably a code name for a Marvell chip], now that's a problem."
- "No, if they gave it to us it is not a criminal problem."
- "Sehat [Sutardja, Marvell's CEO] doesn't go to jail. Manuel [Alba, VP of business development] might go to jail; Manuel gets a black eye."
- "Sure, a Marvell VP out there promising big option grants in proposed pending acquisitions if technology is transferred in advance... That's what's going on."
Jasmine's lawyers, pretty darned happy to have checked voice mail that day, made a beeline for court. It took a few weeks -- partly to prepare the legal formalities, and possibly to hand the tape around the legal team for laughs. (OK, maybe not, but imagine if this had happened a few years later, after MP3 sharing became even more common.) The suit was filed on Sept. 12, 2001, according to Marvell's SEC documents. From that point, it's been one paperwork salvo after another, as Marvel refused to settle.
After lots of legal wrangling and a near dismissal, the case went to a jury this year. The famous voice mail was played in court last month, but the result was anticlimactic, according to The Recorder, a legal trade newspaper that's been following the case: "It was hard to hear what was actually being said, as multiple voices could be heard talking over each other."
Maybe that's part of why Marvell was exonerated. Marvell had also fired back at Jasmine, claiming the intellectual property in question had been stolen from a Stanford University professor and had been sold off anyway (apparently to Cisco Systems Inc. (Nasdaq: CSCO), which, according to Marvell's SEC filings, owns some of the patents in question). Maybe some of those points got to the jury.
If you're wondering what Jasmine even was: It was a startup circa 2000 that was developing an edge switch aimed at service provisioning. The company landed on a very early Light Reading Top 10 list, but fell out of favor quickly. (See Jasmine Networks (2000), Jasmine: Wall Street's Way to San Jose, and Jasmine Networks (2001).)
Coincidentally, Jasmine was involved in another trade-secrets case, in 2003, when one employee was accused of stealing the computer files related to a chip design. (See Jasmine Worker Accused of Trade Theft.)
— Craig Matsumoto, West Coast Editor, Light Reading