SUIT IS NO JOKE
Wal-Mart Files Legal Action Against Amazon.com
Complaint Alleges that Amazon.com Has Been Infringing on Wal-Mart Trade
Secrets
BENTONVILLE, Ark., Oct. 16 /PRNewswire/ -- Wal-Mart Stores, Inc.
(NYSE: WMT; PCX) announced today the filing of legal action against
Amazon.com, and its affiliates, Kleiner Perkins Caufield & Byers,
Drugstore.com, and others, for violation of the Arkansas Trade Secrets Act.
The Trade Secrets Act makes it illegal for an individual, or a group of
individuals, to use a company's trade secrets for their personal advantage, or
to the advantage of a competing company.
Wal-Mart is asking the court to issue an injunction against Amazon.com and
other Kleiner Perkins companies forbidding them to utilize any Wal-Mart
systems knowledge or transferring that knowledge to other companies. Wal-Mart
is also asking them to stop targeting Wal-Mart associates and vendors in an
effort to duplicate proprietary business systems. The lawsuit was filed in
the Chancery Court of Benton County, Arkansas, site of Wal-Mart's corporate
headquarters.
According to Wal-Mart, the purpose of the lawsuit is to bring an immediate
stop to what appears to be a wholesale raiding of its proprietary and highly
confidential information systems by Amazon.com and others through the use of
former Wal-Mart associates.
"We are pursuing this action in the interests of our shareholders and
associates," said Robert Rhoads, Senior Vice President and General Counsel for
Wal-Mart. "Our information and logistics systems are world renowned and a key
factor in our success. We developed these systems, invested the necessary
resources to make them work, and they are for our exclusive use.
"Clearly, Amazon.com has targeted a specific combination of individuals
for their expertise and inside knowledge of Wal-Mart's distribution, data
warehousing, and merchandise management systems. We call on Amazon.com to
immediately stop interfering with Wal-Mart and the individuals in whom our
company has placed its trust and confidence," Rhoads said.
The complaint alleges that by hiring these individuals to gain the
specific knowledge and programs developed at Wal-Mart's expense,
Amazon.com is
improperly trying to obtain trade secrets, as well as other confidential
information, that are unique to Wal-Mart. Wal-Mart has been, and will
continue to be, damaged by Amazon.com's action, the complaint further alleges.
Wal-Mart Stores, Inc. (WMT) operates more than 2,300 stores and 440 Sam's
Club membership warehouses in the United States. Internationally, the company
operates units in Argentina (13), Brazil (9), Canada (147), Germany (21),
Mexico (406), and Puerto Rico (14), and under joint venture in China (3) and
Korea (4). Wal-Mart employs more than 780,000 associates in the United States
and 115,000 internationally. In 1997, the company raised and donated more
than $102 million for charitable organizations. Wal-Mart (WMT) is listed on
the New York and Pacific stock exchanges.
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