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RealNetworks sues ex-staffer, alleging theft of source code
From: InfoSec News <isn () C4I ORG>
Date: Thu, 15 Mar 2001 01:20:06 -0600
http://seattletimes.nwsource.com/cgi-bin/WebObjects/SeattleTimes.woa/wa/gotoArticle?zsection_id=268448455&text_only=0&slug=realnetworks14&document_id=134274339 by Monica Soto Seattle Times technology reporter Wednesday, March 14, 2001 Streaming-media giant RealNetworks has alleged a former employee stole crucial business secrets and gave them to LockStream of Bellevue to develop competing products, court records show. Seattle-based RealNetworks, which makes the most widely used software to play audio and video via the Internet, filed a lawsuit in King County Superior Court last week, claiming Chad Storey gave its competitor access to a wide, potentially damaging array of confidential information, including source code, strategy reviews, marketing plans and "detailed systems overviews" for new and existing products. David Goodman, chief executive of the privately held LockStream, which develops software that encrypts audio and video content, said his company was working independently on the technology in question long before it hired Storey. It filed for patents, not yet granted, to protect the technology, he said. Goodman called the lawsuit an "employee issue" between Storey and RealNetworks. "Our technology has been on the exact same path," he said. "(RealNetworks) is being very heavy-handed relating to this issue." Storey could not be reached for comment. Meanwhile, RealNetworks won a temporary restraining order against Storey and LockStream, barring them from disclosing or destroying any information protected by a confidentiality agreement Storey signed at RealNetworks. The order also allows a RealNetworks consultant to inspect Storey's desk at LockStream and a computer server for any possible source code maintained there. RealNetworks hired Storey in September 1997 as a network programmer, according to court documents. He was promoted to technical operations engineer, and served as a team leader. He worked on various technologies and was given access to certain source code. Storey resigned in November. He went to work for LockStream three months ago as vice president of product development. RealNetworks claims he violated a non-compete order that barred him from working for a competitor for a year. Like other high-tech companies, RealNetworks requires employees to sign confidentiality and non-compete agreements that prevent them from working for a competitor for a set amount of time. Court records show the extent to which RealNetworks goes to protect its proprietary information. Employees with access to source code must wear unique user identifications and have passwords to access the code, records show. The company also restricts employee access to proprietary information, including source code, "to those with a need to know." Most of the information is contained on an Intranet, with no access point outside the company. In a declaration to the court, Michael Christopherson, a former RealNetworks software test engineer, wrote he provided RealNetworks with copies of documents retrieved from Storey's computer at LockStream, such as RealNetworks' "product plans, features, architecture, analyses and strategy reviews." The documents also included "status meeting agendas for RealNetworks executives in charge of development projects" and "detailed system overview documents," he wrote. "Mr. Storey and another LockStream employee are both using RealNetworks proprietary and confidential information, including certain RealNetworks source code, to develop competitive products at LockStream," Christopherson wrote. RealNetworks associate general counsel Bill Way said he could not comment on the potential impact on RealNetworks until all the facts come out. "For a technology company, source code is its most fundamental trade secret," he said. "Anytime you get an allegation that someone is taking your confidential information, you take steps to protect it." ISN is hosted by SecurityFocus.com --- To unsubscribe email LISTSERV () SecurityFocus com with a message body of "SIGNOFF ISN".
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