Amazon.com Countersues Wal-Mart

Answering charges it pilfered top technology executives and swiped trade
secrets, Amazon.com said it is
countersuing discount retailer Wal-Mart Inc. in a 10-K SEC report
filed March 5.

Amazon.com addressed Wal-Mart’s accusations in the filing, stating, “The
Company believes that
Wal-Mart’s claims are without merit and intends to vigorously defend
against the
plaintiffs’ claims. Amazon.com has filed a counterclaim based in part on unfair
competition and intentional interference.”

In October 1998, Wal-Mart filed a lawsuit in Arkansas against the book
e-tailer and other defendants alleging actual and threatened
misappropriation of trade secrets and ancillary common-law claims.

Wal-Mart then requested a temporary
restraining order to stop the defendants from misappropriating Wal-Mart’s
alleged trade secrets, specifically from placing employees in jobs in which
the company feared they would
disclose Wal-Mart’s trade secrets and from soliciting and recruiting
Wal-Mart employees.

In January 1999, Wal-Mart filed another suit, in Seattle, Washington, and
the Arkansas court dismissed
Wal-Mart’s action on jurisdictional grounds before deciding the temporary
restraining order. The dismissal is pending appeal. Wal-Mart said it will
file a preliminary injunction motion. In addition to
injunctive relief, Wal-Mart has requested compensatory damages, pre- and
postjudgment interest and attorneys’ fees and costs.

Amazon CIO Richard Dalzell is an ex-Wal-Mart employee, as is chief
logistics officer Jimmy Wright, who was formerly Wal-Mart’s vice-president
of distribution. Thirteen other former Wal-Mart employees now work for
Amazon.com or subsidiary pharmacy e-tailer Drugstore.com, of which
Amazon.com has a 40 percent stake.

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