Former Hewlett Packard VP stole IBM trade secrets

A former vice president of imaging and printing services at Hewlett Packard pleaded guilty today to stealing IBM trade secrets and faces up 10 years in prison, a fine of $250,000 and a three-year term of supervised release.

The Department of Justice and Federal Bureau of Investigation said Atul Malhotra  had been charged with one count of information with theft of trade secrets. According to court documents, from Nov. 17, 1997, to April 28, 2006, Malhotra worked at IBM as director of sales and business development in output management services for IBM Global Services.

Malhoutra admitted that on March 15, 2006, while employed at IBM, he requested and received confidential information concerning IBM Global Services, CC Calibration Metrics. The trade secret information, marked confidential on each page, included data concerning product costs and materials that IBM used to compete in the marketplace. In providing the requested information, a pricing coordinator at IBM Global Services directed Malhotra not to distribute the information due to its sensitive nature, the DOJ said in a release.

Malhotra became a vice president of imaging and printing services for HP in May 2006 and shortly after shared IBM trade secrets with his superiors. On July 25, 2006, Malhotra sent an e-mail to an HP senior vice president with the subject, "For Your Eyes Only," and attached the trade secret information for which he is charged with sharing. Two days later, on July 27, 2006, he sent an e-mail to another HP senior vice president with the subject, "For Your Eyes Only - confidential," and attached the same trade secret information.

The court documents also reveal that in the e-mail message, Malhotra noted that knowledge of this information would help specific HP sales teams better understand their competitors' goals as the teams determined pricing for prospective deals.

HP reportedly conducted an internal investigation and fired Malhotra after becoming aware of the incident.  Both HP and IBM cooperated in the case, the DOJ said.

Sentencing is set for Oct. 29, 2008.

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