Art of War: MMD Components Suing Ex-Salesmen
Folino, Desai Ring Bells in New York; BCC Technologies Hires Markwood Capital
TECHNOLOGY by Andrew Simons
Back in the late 1990s, officials over at Irvine’s MMD Components Inc. hired a bartender and a construction worker as salesmen for the seller of frequency-control electronics. Now MMD is suing the duo for allegedly trying to put it out of business.
MMD Components recently filed suit against 28-year-old Jason Gann and 25-year-old Casey Conlin in Orange County Superior Court, saying the two stole names from the company’s secret list of customers.
The two then allegedly used the names as the basis for their own company in Newport Beach called Suntsu Frequency Control Inc., named after ancient Chinese general Sun Tzu and author of “The Art of War.”
Both MMD and Suntsu resell oscillators,devices used inside telecommunications and global positioning devices. MMD has been in business since 1994.
“People just steal the company’s information. I’m amazed at how much this happens,” said William Levin, a partner with Laguna Beach law firm Levin & Hawes LLP who is representing MMD. “It’s a classic situation.”
MMD’s claims go something like this: MMD invests more than $1.5 million since 1994 to create a “confidential” customer and vendor list. The list is so valuable that MMD credits it with the company’s success at landing several Fortune 500 accounts.
The information in the database is password protected, with employees only given access to that data needed to perform their jobs.
MMD says it hired Gann, a construction worker, in 1997, and Conlin, a bartender, in 1999.
“Prior to joining MMD Components Inc., neither defendant had any experience in the electronics industry or in sales,” the company said in a statement. “They were given sales training and access to (MMD’s) trade secret information relating to customer contacts, orders, sales history, pricing for a particular customer, lead times for manufacture and delivery of orders, company profit margins, vendors and vendor pricing.”
MMD charges that Gann and Conlin set up Suntsu while still working for MMD. Before they resigned, MMD officials say the two deleted, altered or failed to enter important customer data. MMD also says the two copied its customer and vendor data and specification sheets for its products to use in starting up their own business.
“That information allowed Suntsu to unfairly compete in job bids worth millions of dollars,” the company said.
Nonsense, says Stephen Coontz, an attorney at San Juan Capistrano law firm Coontz & Matthews representing Suntsu.
Gann and Conlin “don’t have any proprietary information. They left all documentation they had behind,” Coontz said. “They started this company based on their own information.”
The first hearing in the case is set for Aug. 9.
Emulex, QLogic Tolling
It’s always good to have your chief executive making cameos on Wall Street.
That seems to be the thinking behind recent guest appearances by two high-profile OC tech chiefs at the New York exchanges in the past month. And these two are from the same family.
Aliso Viejo-based QLogic Corp.’s chief executive, H.K. Desai, opened trading at the Nasdaq market site in New York on June 10.
Not to be outdone, Costa Mesa’s Emulex Corp. just moved from Nasdaq to the New York Stock Exchange.
Chief Executive Paul Folino was on hand last week to ring the opening bell at the Big Board.
Both Emulex and QLogic make gear for storage networks.
BCC Tech Hires Adviser
Irvine-based BCC Technologies Inc., a maker of disk drives for midsize servers and storage devices, recently hired Santa Ana-based Markwood Capital Alliance to help it look into ways to finance new business.
BCC makes storage devices that sit inside a specific type of server used by midsize businesses,often called the “mid-range” market. Specifically, the company makes products for AS/400 servers, a specialty type from IBM Corp.
The company has been busy researching what’s called a mirrored tape backup system, which the company says is useful to recover lost data. BCC said it hopes heightened caution to protect data following the Sept. 11 attacks will translate to increased demand for their products.
