Question

PepsiCo received a letter from an employee of Coca-Cola Company that offered to sell PepsiCo trade secrets of Coca-Cola. The letter stated, “What if you knew the markets Coca-Cola was going to move into and out of and beat them to the punch.” The letter proposed selling trade secrets regarding a proposed Coke product code-named Project Lancelot for $1.5 million.

PepsiCo notified Coca-Cola officials and federal authorities. The Federal Bureau of Investigation (FBI) initiated an investigation into the matter. The federal government brought criminal charges against Coca-Cola secretary Joya Williams. During trail, prosecutors produced the letter as well as a video recording of Williams putting confidential documents and samples of Coke products that were still in development into her bag.

Williams was convicted by a federal jury of conspiring to steal Coca-Cola trade secrets and attempting to sell them to archrival PepsiCo. The trial court judge sentenced Williams to 8 years in prison. The U.S. Court of Appeals upheld the decision. Two other co-conspirators were arrested and pled guilty.

Answer the following questions:

1. Why was Williams' action illegal?
2. If you owned a business, would you pay for illegally obtained trade secrets if it meant that you could get ahead of the competition? Why or why not?

Answer 1

Company L is the manufacturers and distributors of luxury goods, which includes shoes, jewelry, handbags, and other high-end fashion products. Person CL and Person JC involved in sale of counterfeit and knockoff goods. Custom officials seized thousands of counterfeit items (products of Company L and other luxury items) from the defendants. Company L sued Person CL and Person JC for alleging the trademark infringement. Judgment favors Company L.

The court stated that it is infringement if the manufacturers of knockoff goods offer a cheap product to the customers than the original manufacturer.

The activities of defendants are unethical as they involved in importing and selling the counterfeit goods from Country C in the name of Company L. Selling of counterfeit goods is illegal. Thus, the activity of defendants is illegal and unethical.

It is selling of lookalike goods. Sellers will sell the goods with the trademark of original product. This will confuse the customers whether it is original or not. In recent day, it becomes common to see counterfeit goods in every market of the country. People give preference to the low cost lookalike product. It made their entry simple and now the counterfeit products are available in every corner of the country.

Person X has knowingly purchased the knockoff good when he needs a like item. However, he does not want to spend much on the item. Thus, he purchased the knockoff good.

Counterfeit and knock off goods are different from each other. Counterfeit goods are goods which lookalike the original item including the trademark symbol and the brand label. Knockoff goods are goods, which resembles the original good without copying the trademark and brand label.