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EMC Sues Over Secrets

EMC accuses former employee of taking trade secrets to rival Network Appliance

EMC Corp. (NYSE: EMC) is back in the courtroom suing former employees again, only this time its a chief engineering manager -- and, to top it off, the defector has gone to archrival Network Appliance Inc. (Nasdaq: NTAP). The suit demonstrates how high-tech employers can play hard ball with departed senior employees.

The former EMC employee in question is Joanna Karwowska, who managed a team of engineers at Data General when EMC acquired the firm in August 1999. She left just two months later to join Network Appliance.

EMC has filed a breach of contract suit against her, claiming that once at Network Appliance, she planned to sabotage a secret EMC project designed to take Network Appliance on head-to-head. The project was referred to internally at EMC as “Chameleon” and externally by analysts as the “NetApp Killer,” according to sources at EMC.

“Karwowska, didn’t stop here, though,” says Mark Fredrickson, VP of corporate communications at EMC. “She took nine engineers with her.” The majority of these came from her former team at Data General.

It turns out Chameleon the NetApp Killer had been in development at Data General and was a major part of EMC’s decision to buy the company for $1.1 billion in stock. Chameleon, now called the Clarion IP4700, targets the low end of the NAS market, where Network Appliance is the market leader.

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