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Out of the Blue: Magnetoresistive Tech vs. Propri

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Magnetoresistive is a troublesome word, hard to pronounce and consistently flagged by WordPerfect as unknown. I could probably live happily into the next century never having heard of it, but it has become the center of a raging controversy between IBM and a wild duck.

As wild ducks go, this one flew a long way. From Hungary, to be precise. Not flew exactly, fled. In 1956. Nesting of any sort is difficult amidst advancing Soviet tanks.

In IBM parlance, a "wild duck" is an employee with an annoying disdain for rules and procedures. At one time, that distinction may have extended to anyone who wore a blue shirt instead of a white one. In any event, Peter Bonyhard was just such a disdainful duck but with one additional virtue: He is brilliant. With a doctorate in physics and 18 years at the legendary Bell Labs, he has what The Wall Street Journal called "glittering credentials."

For the past five years, in the employ of IBM, Dr. Bonyhard focused his considerable skills on problems in applied magnetics. And that's where "magnetoresistive" comes in. Bonyhard (the "y" and the "h" are silent, I hope) led an IBM team developing the next-generation head technology: magnetoresistive heads-or MR for the techno-illiterate or those simply short on time.

The controversy arose when disk-drive giant Seagate began to covet MR technology for its own product line and succeeded in wooing Bonyhard away from his former nesting grounds. Seagate promptly gave Bonyhard the job of-guess what? Developing the next generation of read/write heads.

But it is likely Bonyhard had signed a nondisclosure agreement with IBM as a condition of employment. Such agreements, common to the computer industry, are designed to protect a company's investment in proprietary technology. Fair or not, they also typically claim for the corporation any inventions or innovations employees develop while in their employ. So before Bonyhard even had a chance to find the coffee machine and the men's room at Seagate, IBM filed suit in U.S. District Court in Minneapolis.

What was unusual about the suit was that initially IBM did not even claim to have any evidence that Bonyhard had actually leaked secrets. They simply argued that it would be impossible for Bonyhard to perform his new duties without disclosing confidential IBM information. On that basis, IBM won an injunction barring Bonyhard from working on Seagate's MR project. Several months later, just to emphasize its point, IBM filed additional charges against Seagate's chief technical officer, Brendan Hegarty-by happy coincidence, another ex-IBMer-accusing him of raiding IBM's talent.

Seagate and Hegarty deny the charges and view all of this as a blatant attempt by IBM to intimidate its employees into not working for competitors. So Seagate did the fashionable thing; it countersued. Seagate claims that IBM simply wants its top engineers and scientists to "remain in lifetime servitude to IBM." And this, Seagate alleges, is unfair competition.

Not to be outdone, Bonyhard filed his own countersuit accusing IBM of interfering with his right to work wherever he pleases on whatever pleases him. Using his repressive homeland as an analogy, Bonyhard observed: "In Hungary, when you graduated from college you were assigned a job and you had very little choice about it. I think if IBM had its way there would be a somewhat reminiscent lack of freedom."

This past April, an appeals court lifted the injunction that prevented Bonyhard from working on the MR project. Seagate argued that research in this area was not confined to the two litigants, and that the field was broad enough to allow Bonyhard to operate without infringing on IBM's trade secrets.

IBM countered that it had no intention of inhibiting job-hopping but cited Bonyhard as an exceptional case: an employee brimming with IBM-confidential information who accepted a mirror image job with a competitor. In an amended complaint, IBM, which had at first simply charged that it was "inevitable" Bonyhard would leak proprietary information, now accuses its former employee of revealing "some of IBM's most innovative trade secrets." Additionally, IBM says Seagate profited from Bonyhard's past experience by being directed away from investing in MR strategies that Bonyhard knew would not work.

Bonyhard insists that MR-head design is his field of expertise and his field of choice. His knowledge of applied magnetics offers him the best opportunity for a well-compensated and intellectually satisfying career. He sees no reason why he should be forced to accept a lower paying job doing something that does not interest him.

All of this is being played out in the context of IBM actively ridding itself of employees in numbers that approach 100,000. IBM points out that in spite of its reductions in work force, the corporation has only filed this one lawsuit, although it has formally warned 10 other recently departed employees about potential trade-secret violations at their new jobs. The court's ultimate decision will have wide-ranging implications for the computer industry where secrecy and job mobility, in uneasy tandem, are key to both culture and competition.

So, gentle reader, these are the facts as best we know them. The final outcome may well affect your own career. It will undoubtedly either solidify or redraw certain boundaries. Many of you have doubtless been asked to sign nondisclosure agreements as a condition of employment. Perhaps some have risen above principle and shared hard-earned scraps of knowledge with new employers. Perhaps it was virtually impossible not to do so. Conscience may make a great guide but an inadequate employer. In any event, since it is clear that IBM and Bonyhard are not likely to reach amicable agreement, we are throwing the issue to you for resolution. You be the judge. You make the call.

Should IBM be allowed to prevent Bonyhard from working on MR-head design based on the need for confidentiality to protect R&D investments and proprietary technology? Or should Bonyhard be allowed to pursue his field of interest in the tradition of a free people working in a free economy, neither consciously seeking to disclose IBM's secrets, nor wholly able to work outside the context of his past experience? That is the question before the court of public opinion.

IBM's message is clear: If you side with Bonyhard, be prepared to back your decision with lavish legal fees.

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