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Erdman and Alpert discussed the deal several times on the phone and once met in the IBM manager's Stamford, Conn., home. As Erdman talked, Alpert taped. The negotiations climaxed in a Sept. 4 meeting at Alpert's Cleveland office. This time, Erdman brought along Engineers Stearns and Eggebrecht, who described his knowledge of IBM product designs. At the end of the day, Erdman left a draft contract for Alpert to sign.
As of last week, the trio of defendants had not told their side of the story. Erdman spoke briefly with reporters and denied having any association with Bridge Technology, the independent computer company he had allegedly helped start. He professed to be "dumbfounded by the whole thing." Said his lawyer, John Bartels: "My client is innocent, and I think we will prove it." Eggebrecht and Stearns shunned the press altogether.
IBM was long the almost unchallenged champion of American computer makers. But as the machines have got smaller and cheaper in recent years, IBM has begun to face new competition from such firms as Digital Equipment Corp., Wang Laboratories and several Japanese companies. As a result, IBM has marketed a broad array of new products like the personal computer, cut prices when necessary and enlisted smaller firms to help write software for its processors.
Greater competition has also meant a more urgent need to guard trade secrets. Says William Easterbrook, a computer-industry analyst at the Kidder, Peabody & Co. investment firm: "IBM is going all out, both to develop and introduce technology, and to protect what they already have."
The suit filed last week gave a glimpse of IBM's elaborate security apparatus. The company spends more than $50 million annually to guard its internal secrets. Hundreds of in-house detectives monitor employees suspected of being security risks, keep confidential information out of the hands of those who do not need it and even prowl around offices at night to make sure that desks are locked.
Such measures sometimes thwart the outright theft of classified documents. But they are less effective in preventing employees with trade secrets stored in their heads from jumping to competitors or starting their own firms. Since 1970, ex-IBMers have launched several highly successful computer companies, including Amdahl Corp., which makes equipment that plugs into IBM systems.
In the past, IBM and other computer companies have tended to accept this problem as part of the competitive game, but now they are taking ex-employees to court more often. Last April, for example, Microcomputer Systems Corp. of Sunnyvale, Calif, won a preliminary $2 million judgment against two former employees who had started a rival firm. In the multibillion-dollar computer business, trade secrets have become too valuable to be given up without a fight. —By Charles Alexander.
Reported by Bruce van Voorst/New York