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Fri, Jul 03, 2009 - 10:18 PM EDT  —  AAPL: 140.02 (-2.81, -1.97%)  |  NASDAQ: 1796.52 (-49.20, -2.67%)

Beleaguered Motorola accuses Apple iPhone executive of taking trade secrets
Friday, July 18, 2008 - 04:07 PM EDT

"Motorola Inc., the largest U.S. mobile-phone maker, has sued a former executive now working for Apple Inc., accusing him of disclosing its trade secrets to aid in the marketing of Apple's iPhone," Andrew Harris reports for Bloomberg.

MacDailyNews Take: As if Apple needed any aid whatsoever in marketing against Motorola's dinosaur phones.

Harris continues, "Michael Fenger in March ended a six-year career at Motorola where he was a vice president for the company's mobile-device business in Europe, the Middle East and Africa. He is now Apple's vice president for global iPhone sales, according to a complaint filed yesterday in state court in Chicago. 'He was privy to the pricing, margins, customer initiatives, allocation of resources, product development, multiyear product, business and talent planning and strategies being used by Motorola,' according to the complaint."

MacDailyNews Take: Come on, Motorola had "planing and strategies?" Oh, yeah: "Rest on our laurels and do nothing except blow smoke up our investor's asses while we rapidly lose our mobile phone business by being hopelessly out-innovated and outclassed by Apple. You know, like Palm."

May 10, 2007: Motorola's then-Chairman and then-CEO Ed Zander said his company was ready for competition from Apple's iPhone, due out the following month. "How do you deal with that?" Zander was asked at the Software 2007 conference in Santa Clara, Calif. Zander quickly retorted, "How do they deal with us?" - IDG News Service

Harris continues, "Fenger's employment by Apple violates his written promise not to work for a competitor for at least two years after leaving Motorola, the company said in the complaint. Motorola seeks a court order barring Fenger from working for Apple."

Full article here.

MacDailyNews Take: Can't compete? Litigate.

Nobody said the bloodbath would be pretty.


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Jul 18, 08 - 04:10 pm Comment from: ericdano

Very sad.

Jul 18, 08 - 04:20 pm Comment from: dan

their very initiative to sue speaks volumes about their desperation and foreboding of impending disaster in phone revenues. that coupled with the previously written option MOTO was considering of splitting off its unprofitable phone business puts Motorola, Erikson, and RIM in revealing light.

Jul 18, 08 - 04:24 pm Comment from: Ferf Muckmeyer

Non-compete agreements are very typical in the tech sector. I've had to sign a few in my time. But most are not enforceable unless a solid connection can be established between technologies or strategies developed at Motorola and those of Apple. And we all know that's never going to happen. I would say Mr. Fenger has nothing to worry about, and even if he did, Apple would indemnify him anyway.

Besides, the only reason this is coming up is Moto's failures in the cellular biz anyway - what do they have in the way of ANY smartphone that would compete with anyone?

gk

Jul 18, 08 - 04:24 pm Comment from: Spark

If Fenger signed a non-compete contract when leaving Motorola then I think they have grounds for a suit against him. We don't know the specifics, but executive often receive bonus upon leaving a company that come at the price of non-competition. He may be in a bit of trouble here.

Jul 18, 08 - 04:26 pm Comment from: ron

"Fenger's employment by Apple violates his written promise not to work for a competitor for at least two years after leaving Motorola, the company said in the complaint. Motorola seeks a court order barring Fenger from working for Apple."


Is slavery still allowed in the USA?

Jul 18, 08 - 04:27 pm Comment from: Ampar

"Come on, Motorola had 'planning and strategies?'"

I disagree. Anticipating the need to file for Chapter 7 requires extensive planning and strategy.

Jul 18, 08 - 04:40 pm Comment from: Daily Reader

Apple is based in California and California is a 'right to work' state. My understanding is that non-competes are largely unenforceable in California on the grounds that preventing you from working in an area where you have expertise prevents you from working.
This seems more like sour grapes and an attempt to distract...a nuisance suit rather than something Motorla is really serious about.
But...I'm not a lawyer...tho' I did consult one when this issue affected me in California once upon a time.

Jul 18, 08 - 04:42 pm Comment from: ElderNorm

Michael Fenger is NOT working for a competitor. Motorola makes cheap crap with no innovation. Apple makes mobile computers that.... oh yeah, just happen to make cell calls.

No competition at all... grin

Just a thought

en

Jul 18, 08 - 04:48 pm Comment from: Ferf Muckmeyer

Illinois is also a right-to-work state, so again Fenger is probably OK. If he used intellectual property of Motorola at Apple, that's another story.

But WTF is intellectual at Motorola?

Jul 18, 08 - 04:48 pm Comment from: Mr. iPhone

Poor Motorola...

Jul 18, 08 - 05:07 pm Comment from: FloydPink

He brought all the inside secrets of the amazing Rokr.

Jul 18, 08 - 05:20 pm Comment from: viktor

lol, lol, lol, lol, lol, lol, lol, lol, lol, lol, lol, lol, lol, lol, lol, lol, lol, lol, lol, lol, lol, lol, :0 :0 :0 :0 :0 :0 :0 :0 :0 :0 :0 :0 :0 :0 :0 :0 :0 :0 :0 :0 :0 :0 :0 :0

It is the most funniest thing I ever heard? are those guys for serious? I am pretty sure they are just joking. I bet you.

Jul 18, 08 - 05:32 pm Comment from: freebeer

Come on - everybody knows someone with a title like V.P. wouldn't know a thing about any real secrets or development. To jump from Motorola to Apple shows that at least he's smart or a great salesman. Moto heads probably wished they had paid attention to what the guy had to say in meetings while he worked for them.

Jul 18, 08 - 05:37 pm Comment from: Hypocracy

"MacDailyNews Take: Can't compete? Litigate."

So. You are saying that Apple can't compete with Psystar?

Jul 18, 08 - 05:44 pm Comment from: Sixvodkas

@ Hypocracy;

If that's the best your feeble brain can come up with, I suggest you study logic.

(btw, it's spelled "hypocrisy", you incompetent moron)

Jul 18, 08 - 05:47 pm Comment from: Sixvodkas

Sorry!

I'm attempting to not to cast so many insults, so I shall now apologize to the morons out there for placing you on the same level as "Hypocracy".

Jul 18, 08 - 05:50 pm Comment from: bizlaw

It very much depends upon the jurisdiction which the non-compete agreement is to be interpreted under, as well as the specificity of the restrictions.

Many non-competes are designed to protect proprietary information, like customer lists, patents, etc. If Motorola is simply trying to prevent Fenger from working at Apple in a marketing position, they'll have a tough time winning unless the agreement states a VERY non-compete friendly jurisdiction.

Jul 18, 08 - 05:53 pm Comment from: bizlaw

@ MDN's take:

"Can't compete? Litigate."

Be prepared to throw that back at Apple when Apple files suit against the next Psystar, Microsoft, etc.

The only other option Motorola has is to throw RAZR phones at Fenger, which would lead to battery charges anyway.

Jul 18, 08 - 06:18 pm Comment from: Ampar

" . . . which would lead to battery charges anyway."

Or just a whole lot of battery charging as revolting as that sounds.

Jul 18, 08 - 06:23 pm Comment from: Me

I used to work at Motorola. I have never seen such a disorganized, management free organization. Why they are taking the trouble to sue over this guy is beyond me. they have enough problems and they are wasting their time with this? I'll bet they are just doing it as a warning to whats left of their management that they same thing will happen to them if they leave the company.

Jul 18, 08 - 06:27 pm Comment from: Sir Gill Bates

Man, I just KNEW there was a reason for Apple's success and Motorola's downward slide. I'll bet Fenger was an Apple plant the whole time. Freakin' corporate espionage.

Looks like Apple gave Moto the Fenger.

Jul 18, 08 - 06:59 pm Comment from: Gil

Wanna save some money eh. Pull your sponsorship of Danica Patrick. tongue laugh

Jul 18, 08 - 10:47 pm Comment from: The Other Steve

All Michael Fenger has to say to a judge (or jury) is, "Have you seen the products Motorola is putting out? Exactly what product do they think is competing with the iPhone?!?!?

Jul 18, 08 - 11:14 pm Comment from: Ex-Mot

Motorola sneaks in a non-compete into the stock option exercise paperwork. Sneaky, but I'd suspect it's not entirely enforceable.

Jul 18, 08 - 11:17 pm Comment from: dd

F Mot and their stupid ROKR.

F Mot and their inability get the G4 running on anything greater than a 167MHz FSB.

F Mot and their stupid RAZR.

Jul 18, 08 - 11:29 pm Comment from: MizuInOz

Moto who?

Jul 19, 08 - 01:14 am Comment from: No Law

@bizlaw - you should be sued for your name. Psystar violated copyright and downright stole from Apple. MS too, but in a more clever way. Say you invent a widget, and I buy a copy. Then I sell that widget half a million times without giving you credit. Uhh, Mr. Bizlaw, we're not in China.

Jul 19, 08 - 01:38 am Comment from: TheConfuzed1

I believe there may be a loophole in the fact that at the time that he went to work for Apple, they were not yet competitors of Motorola. Of course, I'm no lawyer, so I could also be very wrong.

Jul 19, 08 - 01:41 am Comment from: Sope

--------------
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| + | | + |
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\ _____ /

Jul 19, 08 - 08:55 am Comment from: Sir Gill Bates

Sope,

You must be a whiz on an Etch-A-Sketch.

Jul 19, 08 - 06:05 pm Comment from: Rainer

Hello???

he stopped working for Motorola in March.
Apple started working on the iPhone how many years ago? 3? 4?
I would understand this law-suit, if he had started working for Apple in January 2006.
Of course, he took a lot of knowledge with him - Apple probably hired him precisely because of that. Surprise, surprise.
But unless he took actual customers who had then dumped Motorola (and Motorola can prove that) I would call this a stupid publicity stunt.
I think it's OK to have clauses in contracts that forbid taking customers directly with you - that's really bad style IMO.
But anything beyond that is just silly.

Jul 20, 08 - 02:45 pm Comment from: Gregg Thurman

The issue isn't trade secrets, it is his employment agreement. Motorola wants to be compensated for rescinding his employment agreement, just as Fenger would sue for satisfaction of his employment contract if Motorola let him go.

I'm sure this is something Apple/Fenger anticipated when Apple offered Fenger the position.

This is just Corporate negotiations going on. Nothing sinister about it.

Jul 21, 08 - 06:47 am Comment from: HMCIV

"How do they deal with us?"

Hmm... stealing the thunder of every cell phone manufacturer (twice!) and neutralizing one of Motorolla's top VPs isn't a bad start.

Hey Zander, can you guess what's coming for an encore? Zander? Drat, where'd he go?

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