Is a Fungus Among Us?

Beware employee theft of trade secrets, intellectual property and clients

June 2008 By Denny Hatch

multipage

Here are two stories about people working for two businesses—an employee in one and members of the board in the other—who knew a lot about their respective companies.

Both allegedly annexed a core product and went into competition with it.

Both cases have resulted in lawsuits and countersuits.

A person that would do this to an employer is a fungus—a parasitic organism that obtains nourishment by locking onto a host and sucking it dry.

What can you do if such a person is loose in your company?

If you have an idea for a new product, do you develop it and then offer it to your current employer? Or do you surreptitiously shop it elsewhere?

If so, why?

A Personal Digression
In 1964 I got a job selling advertising for Library Journal, a magazine published by R.R. Bowker. At the time, book publishers produced seasonal catalogs—usually fall and spring—which were mailed to the Bowker editorial department as well as to booksellers, wholesalers, agents, foreign rights buyers, schools and libraries.

Arriving in the mail at different times, these catalogs came in various sizes and shapes and were stuffed into files, where they spilled out and were a perpetual nightmare to keep current. I figured a better information system had to exist, one that was more efficient, user friendly and less costly to the individual publisher, who was spending a fortune on composition, printing, binding and mailing.

At a client’s office, I discovered how British publishers dealt with the problem of catalogs. In the waiting room was a multivolume set of fat, paperbound books—a compendium of publishers’ catalogs bound together alphabetically. It was produced and shipped by The Bookseller—the British version of Publishers Weekly. From this I came up with the idea for “Publishers Combined Seasonal Catalogs”—same format as the U.K. product, same concept—and quietly floated the idea to a number of my clients who advertised with Library Journal.

Some publishers loved it. They immediately saw that by participating in this format (1) their catalogs would not be lost in an overstuffed file drawer and therefore would be far more easily accessible, and (2) this co-op binding and distribution system would save considerable money. Further, they could produce overruns for their sales representatives and as giveaways at the American Booksellers and Library Association conferences, as well as regional gatherings.