Amazon Sues Former Exec Over Suspicions He Took Trade Secrets To New Startup

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Eric Lieberman Managing Editor
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Amazon has reportedly filed a lawsuit against a former executive who left to join another startup, alleging that in taking new employment too early, he retained in his own personal memory critical trade secrets.

The tech conglomerate is specifically accusing Gene Farrell, Geek Wire first reported Sunday, a former vice president in its cloud computing division known as Amazon Web Services (AWS), of violating the non-compete clause of their agreement by leaving to work for Smartsheet too soon.

Their contract allegedly stipulated that he couldn’t contend against the company “for a limited time following the termination of his employment.”

Amazon claims Farrell was bound to not work for competitors for 18 months following his departure. Farrell left Amazon effectively May 26.

AWS offers businesses a number of cloud-based services, products and features, often for streamlining purposes, including corporate email and scheduling, file storage and collaboration, and virtual meetings like video calls. (RELATED: Amazon Wants Flying Warehouses Now)

“Farrell was deeply involved in and knows, among other things, the technical details of these products,” Amazon outlines in its official lawsuit. “As a Vice President, Farrell had access to the most critical confidential and proprietary information of AWS … including the development of news products not yet publicly launched or announced.”

The legal complaint, in a way, signals that Amazon, the e-commerce giant, cares deeply about its business productivity applications and may want to rival other tech companies that offer such services. Microsoft, for example, dominates the business apps market.

Amazon appears worried that its ostensibly unique technology will get in the hands of Smartsheet. Even though the relatively nascent company doesn’t seem to purvey very similar products to the limited amount Amazon offers, the lawsuit could imply that it is in the process of developing a product that may rival Smartsheet’s services.

“Farrell helped develop significant aspects of the [redaction] product and participated in key meetings in which its functions, architecture, strength and weaknesses were demonstrated and discussed,” reads Amazon’s motion for a temporary restraining order. “Farrell offered to continue to advise that team even after he took on a new role at AWS.”

Smartsheet CEO Mark Mader said the lawsuit is an “enormous overreach” because Amazon is essentially arguing that all business productivity apps are competitors of AWS, according to Business Insider. (RELATED: Amazon Looking To Remove Human Workers From Grocery Stores, Says Report)

These two tech companies aren’t the only ones engaged in a legal battle over proprietary data.

Google is currently embroiled in a highly similar dispute with Uber and the founder of a self-driving startup. The tech giant accuses the former executive of leaving the company with more than 14,000 secret and exclusive files and starting his own company, which was later acquired by Uber.

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