Microsoft, Apple Drop Legal Bomb on Errant Employees

This week, both Apple Computer and Microsoft dropped legal bombs on workers who took advantage of the companies. At Apple, a former contract worker stole plans to the company's PowerMac designs and posted them on a public Web site before the product's release. In the Microsoft case, an employee sold more than $9 million worth of Microsoft software that he purchased inhouse at a steep discount. The companies announced these legal cases just days after Microsoft threatened a Windows enthusiast Web site with legal action if its proprietor refused to hand over its domain name freely to the company.

Today in California, Apple sued Jose Lopez, a former contractor, charging him with trade-secret theft and breach of conduct. According to the complaint, Lopez last summer stole designs for Apple's then-upcoming PowerMac G4 product revision and posted them on a public Web site before the product's release. The designs included schematic drawings, images, and engineering details, Apple says.

"Innovation is in Apple's DNA, so the protection of trade secrets is crucial to our success," the company wrote in a statement. "Our policy is to take legal actions where necessary to preserve the confidentiality of our intellectual property." This case is the second high-profile case involving Apple trade secrets. In 2000, the company sued a former contractor, Juan Gutierrez, for revealing details about upcoming Apple products, including the iBook revision. Apple later settled out of court with Gutierrez, who went by the online pseudonym "worker bee."

Apple holds trade secrets a bit more closely than other companies do. The Macintosh maker likes to introduce products as surprises for its fans during lavish Steve Jobs keynote events at the MacWorld trade show or during secretive product launch events that it often announces to the press at the last minute. Because the company's financial performance hinges so much on the often-breathless reaction of its fan base, any details about upcoming products can seriously dampen enthusiasm for the official release events.

Meanwhile, yesterday Microsoft fired Daniel Feussner, a 32-year-old software developer who spent most of this year using Microsoft funds to purchase more than $9 million worth of Microsoft software inhouse, then selling it on the street at a steep discount. Feussner, who was arrested yesterday, spent the proceeds from his scam on expensive cars and jewelry and a 51' yacht. He was charged with five counts of wire, mail, and computer fraud, with each count carrying a maximum of 5 years in prison.

According to the complaint against Feussner, the former Microsoft employee ordered his assistant and other employees to purchase nearly 1700 high-end Microsoft products, including Windows 2000 Server, SQL Server 2000 Enterprise Edition, and Visual Studio .NET, which the complaint says cost between $1800 and $20,000. The employees made the inhouse software purchases between December 3, 2001, and November 25, 2002. In June, federal investigators observed Feussner exchanging stolen merchandise for cash in a parking lot in Bellevue, Washington, near the Microsoft campus. According to the FBI, Feussner's bank balance, which averaged $2158 before February 25, 2002, ballooned to an average of $129,775 after that date.

Feussner apparently led the high life with his illicit gains. This year, he purchased a $95,000 Ferrari, a $36,000 Jaguar, a Hummer H1, a Mercedes 500SEL, a $21,000 Harley-Davidson motorcycle, an $8000 diamond ring, a $2230 Rolex wristwatch, and a $4000 bracelet. In August, he put down $65,000 toward a 51' yacht, financing the remaining $120,000. He then bragged about his purchases on a personal Web site in which he described himself as "The Dude," a reference to a character in the Coen Brother's film "The Big Lebowski."

Microsoft has little to say about the incident, other than the fact that the company has been working with law enforcement throughout the investigation. "We take employee theft very seriously and realize the effect it can have on the value we provide our customers and our shareholders," a company spokesperson said today. "We have a number of internal measures in place to identify theft and work very closely with the appropriate authorities on these matters." An outgoing personality with waist-long dreadlocks, Feussner was in charge of Microsoft's MSN search engine.

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