Idexx Labs: Animals and Spies -- Large, Small and Dumb
IDEXX Laboratories, Inc., of Westbrook, Maine, calls itself a world leader in providing diagnostic, detection, and information products to the animal health industry as well as quality assurance products and services to the dairy and water industries. Its revenues in year 2000 exceeded $367 million.
One of its divisions develops and markets diagnostic tests and kits, as well as software, to aid in raising what’s called “production animals,” including cattle, swine and poultry. Another division develops and markets test kits for specific diseases – such as heartworm and feline leukemia – more commonly found in household pets. IDEXX also manufactures tests sold directly to veterinary clinics from coast to coast and in 50 countries around the world. The company has 2,200 employees total worldwide, including 650 at its Westbrook headquarters.
In May 1995, Caryn L. Camp began working at IDEXX as an entry level Manufacturing Chemist and, in recognition for her good work, was promoted regularly. Within three years, she became a Technical Service Representative, with access to, and knowledge of, IDEXX’s full product line and many of the company’s most valuable trade secrets. As part of her employment, she signed a standard IDEXX Non-Disclosure Agreement, stating, in part, that her relationship with her employer “is one of high trust and confidence by reason of my access to and contract with trade secrets and confidential and proprietary information of the Company and its customers and contractors.” She went on to promise not to “disclose to others, or use for my own benefit or the benefit of others, any of the Developments or any confidential, proprietary or secret information owned, possessed or used by the Company or its customers or contractors,” and that would include all “trade secrets, processes, data, know-how, marketing plans, forecasts, unpublished financial statements, budgets, licenses, prices, costs and employee, customer and supplier lists.” And on the same day she was swearing that oath of allegiance, she also signed a Non-Compete Agreement promising that she wouldn’t engage or enter into any business enterprise that competes with IDEXX while she worked there and for two years after leaving its employ. And for good measure, as long as her pen was out, she also signed the company’s Corporate Policy on Ethics in Business Conduct document in which she acknowledged that she had a duty to “avoid situations in which there is, or may seem to be, a conflict of interest between” herself and IDEXX.
Somewhere along the line, all of this must have slipped her mind.
Enter Stephen R. Martin, a fast-talking California veterinarian and purported owner of Wyoming DNA Vaccine, sometimes called Wyoming VaccinePharma. Martin also owned Maverick Technologies, sometimes called Scorpion Pharmaceuticals. By whatever name, Martin’s various enterprises were out to compete with IDEXX.
According to Federal Grand Jury indictment, in January 1998 Camp contacted Martin’s company via e-mail and later sent a copy of her resume. That same day, without ever speaking to Camp or interviewing her in any way, Martin responded that his company “was going to be heavily into diagnostics in the next few years. We need someone with your qualifications to assume scientific control of the division.” If he was sincere, it had to be the fastest and least thorough job interview on record. At the same time, Camp never checked into Martin or his companies or questioned why he would be offering her a job without any formal job interview or background check.
More likely, Martin correctly saw in Camp an easy mark and a source of incredibly valuable information. Whichever, the real loser was slated to be IDEXX.
Continuing until August of the same year, Camp and Martin went shopping at IDEXX, like newlyweds rushing to furnish a new home.
During the spree, Camp sent Martin things such as IDEXX test kits and sales reports, detailed IDEXX manufacturing process instructions, internal IDEXX documents explaining certain operating procedures, laboratory notebook pages, quality control procedures, customer lists, and copies of company e-mails. Some of the material were trade secrets and others were confidential or proprietary. All of it belonged to IDEXX.
Martin sent specific shopping lists by e-mail requesting additional information about IDEXX’s manufacturing methods and processes, the company’s markets and pricing information. Camp must have gone up and down the company’s aisles filling her shopping basket and sent all of the requested information to Martin.
In March, Martin boldly branched out, telling Camp that his company “is not concentrated on either livestock or human vaccines. We will develop any vaccine for which there is a market.” Two days later he sent her an e-mail dangling in front of her the prospect of working for either of his companies, since his second company, Maverick, also “is going to be in the test kit market.”
The same month, Martin broadened the offer suggesting she could work for both companies, but urged her to learn “absolutely all you can [about IDEXX’s operations]. Events may start popping very fast very soon.”
Just a few days later, Martin wrote her, “If you continue to make friends and influence people in the industry, your ultimate job title will have something to do with products development.… You may become CEO yourself some day. You certainly have the drive. Can you take the heat?”
One month later, Martin’s shopping list requested “any info. you could provide on the HOT topics in veterinary diagnostics.”
Not satisfied with whatever she ultimately sent, he wrote back two days later requesting “more stuff regarding the hot topics in veterinary diagnostics. I need to keep busy thinking about the nature of the veterinary diagnostics we should get involved in early.” He then requested information on IDEXX’s product pricing, its test kits, and general questions about the company’s business.
Camp responded the same day, answering most of his questions. Then, the next day, she e-mailed Martin that she was sending “lots & lots of goodies for your next rainy day.” In addition to the price lists, she included internal IDEXX correspondence which she described as “borderline confidential – very gray area, more black.”
Let me interrupt the narrative flow here to interject a serious question: What the hell was she thinking? “Borderline confidential”? “Very gray area”? The Federal indictment details chapter and verse of what she shipped out to Martin for (at this point) more than four months and now – just now – she’s beginning to think that something she’s sending may be confidential, even “borderline confidential.” What the hell did she think all of the other stuff was, Christmas wrapping?
But notice, please, that it did not stop her. Oh, no; she sent the “borderline confidential” material…and continued to send more and more material for another three months. Martin must have thought he’d died and gone to heaven.
The next month she notified Martin of a potential joint venture partnership IDEXX was contemplating with another company.
One month later, Martin was back trick-or-treating at her door. This time he wanted her to fill his bag with information regarding how IDEXX performed certain tests. Eager to comply, she typed a memo explaining in detail how those tests were performed. She e-mailed this document to herself at her home. That night she forwarded it to Martin.
Why did she send it to herself? Was she trying to cover her tracks? It certainly seems that way, although why did she think that her previous tracks wouldn’t be uncovered?
And why was Martin so eager for those particular tests? Because, as he confided to his spy in an e-mail attachment that he said was “very secret,” a foreign company had expressed an interest in developing diagnostic kits for cats and dogs and forming a “joint business” if Martin’s products had any potential. Apparently, Martin’s products didn’t, which is why he needed IDEXX’s.
She complied within a couple of days and sent him all of the detailed information he asked for describing IDEXX’s tests for certain animal diseases.
Two days later she sent an e-mail describing what she was getting ready to send by mail – she called it “a great package of goodies for you.” In her summary covering sheet, she itemized such things as a testing device, price and product comparisons for certain products, an IDEXX technical manual, information regarding IDEXX’s plate manufacturing. On some of the material she sent, such as pages from a laboratory notebook, purchase specifications for a serum, and an internal product study, she wrote “ALL CONFIDENTIAL.” (I suppose there wasn’t even a hint of “borderline” here). She also scribbled ‘Proprietary – Confidential” on a post-it note.
Soon thereafter, she sent an e-mail to Martin telling him to clear “out some room in your fridge because I sent some kits today via Federal Express….”
He responded the same day by telling her to keep “thinking about the competition, and how we can beat them. Lips are sealed.”
Now finally – after all these months – it was time to talk about money... sort of. He sent her an e-mail concerning a test to detect a certain feline disease, stating that the test could be done, “AND, if such a test can be marketed, we’ll give you enough bonus money to buy your own house for cash. Maybe on the Lake.” Then, later on the same day, he sent another e-mail to her, saying that he would “like to play with the software you mentioned.”
Around this time she informed him that she was ready to resign from IDEXX in the near future. He responded:
Before you bag IDEXX (I am embarrassed to ask you this), absorb as much information, physically and intellectually, as you can. I never had a spy before. We are going to be in the veterinary business big time – vaccines and diagnostics. Dogs, cats, poultry, and livestock. You will eventually all [sic] the diagnostic business, vet. and human….
(Then, at last and almost as an afterthought, he finally got around to asking her salary requirements). Why is he suddenly embarrassed to ask her to spy? Who’s kidding whom? Was this line for her benefit? Had he been deluding her into thinking that she wasn’t spying? Don’t bet the farm on it. Here’s Camp’s reply to Martin, after she first tells him who at IDEXX Martin ought to try to hire for his company:
Well, I’m afraid that the only time I’ll have left for absorbing much information, physically and intellectually, is this Thursday and Friday. Though I have been filling my briefcase every day with all the stuff that I want to keep. Today I brought the last load home. Aren’t I awful? I’m liking this spy business way too much. I’ve actually sent you everything…. The problem with hiring [the employee just mentioned] or anyone from IDEXX is that they’ll see what a thief I am!
At the end of July, she sent Martin two boxes containing seven binders of marketing information and information about IDEXX’s competition. As she did so, she sent Martin an e-mail stating that she had just worked her last day at IDEXX, but she hadn’t told anyone. She mentioned that she had uncovered a “jackpot when I came across the location of the cat & dog marketing goodies.”
Then, instead of sending the incriminating e-mail to Martin, she inadvertently sent it to another IDEXX employee!
(Do you perhaps think that deep down she really wanted to get caught?)
One minute later, to her horror, she discovered her error and sent the original e-mail to Martin, and in yet another hastily written message, she explained her e-mail error and urgently wrote:
Do you know what this means? Look at what I’ve sent to you. They know I’m resigning. But worse, they know I’ve been stealing, so-to-speak, from the company and sending info to someone. Can I go to jail for this? I am so scared…. At least your whole name’s not mentioned, nor your company. So I guess it could be worse. But I don’t think by much.
Oh, yes, it could...“so-to-speak.”
On September 16, 1998, in U.S. v. Caryn L. Camp and Stephen R. Martin, the two conspirators were indicted by a Federal Grand Jury in Maine on 15 counts, including violations of the Economic Espionage Act – conspiracy to steal IDEXX’s trade secrets. [i]
Shortly before they were arrested, Camp met Martin for the first time in Denver. Neither of Martin’s companies had any employees nor any assets, and when she eye-balled him, rather than giving off the appearance of a successful businessman, Martin had a long hair and beard, wore tie-dyed clothes of the hippie era, and drove a VW van. At the time of his arrest he had been living with his mother in a mobile home retirement community.
They both pleaded not guilty, but after the Feds uncovered more than 200 e-mails in her computer, Camp copped a plea to guilty and agreed to testify against Martin. Martin was convicted and sentenced at a year and a day in prison.
When I spoke with Conan Deady, IDEXX’s general counsel, he said the Camp case was the first and so far only economic espionage case of that magnitude to ever hit the company, although there were many cases over the years of former employees taking trade secrets or other proprietary information when they left IDEXX and went to work for competitors.
The typical legal response in cases where a non-disclosure agreement has been breached is to send a cease and desist letter, which he said usually does the trick. “But if necessary, we have litigated in cases where we believe our non-compete agreement has been breached, because it is easier to prove someone violated that sort of specific agreement than a nondisclosure agreement,” he said.[ii]
He thought the Camp case had a chilling effect on employees, who may not have realized that stealing – stealing the way Camp stole – was a criminal matter and that you could go to jail for it. “Their understanding of the legal system was not all that sophisticated,” he said. It is now.
However, despite the Camp case, it was surprising to learn that IDEXX has taken no additional steps to further educate or train their employees in understanding what trade secrets are and why it’s important to protect them. Deady believes that the wide-spread publicity over the Camp case was sufficient to raise the awareness level within the general employee population of the steps the company will go to protect trade secrets.
As far as any additional measures the company took since being victimized by Camp and Martin to further protect its trade secrets, there were none. Deady believes the current measures are sufficient, but said they did do some minor tinkering to enhance protection.
However, in my opinion, “educating” your employees about protecting trade secrets by letting them read in the papers or hear on the news how one of their own was caught and hung out to dry is cold, callous and mean-spirited, especially when dealing with what Deady described as employees who are “not all that sophisticated about the law."
[i] The facts contained in this section are summarized from the Grand Jury Indictment in United States of America v. Caryn L. Camp and Stephen R. Martin, United States District Court, District of Maine, September 16, 1998, and the quotations are taken from the numerous e-mail exchanges between the two defendants, as cited in the Grand Jury Indictment.
[ii] Author’s interview with Conan Deady, May 11, 2001.