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Lessons from Intel's Trade-Secret Case

Lessons from Intel's Trade-Secret Case
Lessons from Intel's Trade-Secret Case

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By Michael Orey
November 18, 2008

Allegations of trade-secret theft by an employee of chipmaker Intel 
(INTC) shed light on the surprising vulnerability of one of the world's 
biggest and most sophisticated technology companies.

Biswamohan Pani, a low-level engineer at Intel, made off with 
information valued by Intel at more than $1 billion, according to a Nov.
5 indictment. Pani is due to appear in Boston federal court to be 
arraigned on Nov. 20.

Pani allegedly used the simplest of ruses to walk away with some of the 
chipmaker's most valuable and closely guarded information, and Intel 
later learned of the actions seemingly by chance. The case could provide 
an object lesson for companies hoping to keep their data from walking 
out the door with departing staff. "It's amazing how poorly most 
companies deal with these [information security] issues," says Nick 
Akerman, a New York lawyer who specializes in trade-secret cases and 
reviewed court filings in the Pani case. The facts alleged in the 
indictment reveal "an overall lack of sophistication" in Intel's 
"ability to prevent this stuff from leaving their company.=E2=80=A6For a company 
that's got this much valuable information, this is terrible."

"Mission-Critical Documents"

One of the most intriguing aspects of the case is that Pani was able to 
remain an Intel employee=E2=80=94with access to sensitive company data=E2=80=94for days 
after beginning a job at rival Advanced Micro Devices (AMD). According 
to court filings, Pani set June 11, 2008, to be his last day at Intel, 
but said he would be out of the office until that time, making use of 
accrued vacation time. In fact, Pani began working at AMD on June 2. Yet 
by also remaining on Intel's payroll, he maintained access to Intel's 
computer network. Using his Intel-issued laptop, Pani remotely 
downloaded 13 documents designated as "top secret," prosecutors allege. 
These "included mission-critical documents describing in detail the 
processes Intel uses for designing its newest generation of 
microprocessors," the indictment states.


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