Jasmine Networks Inc.'s epic trade secret case against Marvell Semiconductor Inc., featuring a general counsel's accidental voice mail confession, was suddenly dismissed (.pdf) Wednesday.
Santa Clara Superior Court Judge Thomas Edwards ruled that Jasmine doesn't have standing to sue because the bankrupt company had sold off the trade secrets in question.
Marvell's lawyers at Latham & Watkins filed a motion to dismiss the case in the midst of pretrial motions last week, nearly eight years after the case was filed.
Steven Bauer, who led the Latham team, said he wasn't authorized to comment on the case and a Marvell spokesman was traveling and couldn't be reached for comment.
Jasmine's lawyers at McGrane Greenfield argued that although Jasmine sold its IP in 2002 after going bankrupt, it still had the right to pursue the litigation, which had been filed a year earlier. In court filings, the lawyers for Jasmine argued that the bankruptcy judge in the case had found that Jasmine had standing to pursue a claim against Marvell.
Edwards wrote that the issue of standing appeared to be one of first impression, because "neither counsel nor the court has found an appellate decision that determines whether a former owner, in this case Jasmine, who is neither an owner or a licensee, has standing to maintain an action for misappropriation of a trade secret that it sold to third party." Edwards concluded anyway that Jasmine doesn't have standing because a "former owner no longer has a protectable interest in the property." The judge granted a stay to the proceedings while Jasmine appeals the issue.
"It was a novel issue that would represent new case law," said Christopher Sullivan, a McGrane Greenfield partner representing Jasmine. "We disagree with it and think it presents a more than substantial issue on appeal."
It's the latest twist in a dispute that began when Marvell's former general counsel, Matthew Gloss, forgot to hang up after leaving a message for Jasmine's legal chief and allegedly continued to talk with two colleagues on speakerphone about stealing trade secrets from Jasmine. Jasmine's lawyers recently won a battle to keep the recording in evidence at the trial.
Latham is just the latest in a long line of law firms to represent Marvell in the case. Quinn Emanuel Urquhart Oliver & Hedges had worked on the case from October 2008 until late January when it was disqualified for a conflict. Before that, Marvell had used Buchalter Nemer and, briefly, Fenwick & West.
Latham's last-minute motion to dismiss details how Jasmine sold off its IP for $300,000 to Teradient Networks. Latham lawyers write that Jasmine then reorganized with one employee, CEO Robert Imhoff, who fronted $600,000 to fund Jasmine's only remaining asset -- its case against Marvell. According to the motion, the plaintiffs lawyers have a contingency-fee arrangement worth 40 percent.
McGrane Greenfield's Sullivan said everyone was ready for trial. "We were surprised that the issue surfaced so late," he said.