Series 17 Integrated Circuit Engineering Collection LITIGATION 


The memo below is a letter written by Glen Madland describing how the case began. (It is transcribed exactly)
The Catalyst Letter
September 18,1968


"My side of the story" received March 15, 2005 - by Stephen Levy follows Madland's memo
CLIENT CONFIDENTIAL

[ICE letterhead]


September 18,1968

Memo for File: Fairchild
cc: Farrow, Dicken, Bower
From: G. Madland


Subject: Conference with Les Hogan

On Tuesday, September 10, 1968, Frank Bower called and alerted me that Les Hogan planned to call ICE and discuss our acting as an expert witness in the case Motorola versus Fairchild. Les Hogan's call interrupted Frank's and I had an extensive telephone discussion with C.L. Hogan. Hogan recited the story of his getting hired by Fairchild. My notes on the telephone conversation follow.

Les Hogan stated that he was offered the presidency of Fairchild toward the end of June or beginning of July 1968. He turned down the offer at that time. In turning down the offer, Les attempted to help Motorola by giving them a memorandum of Fairchild's sales and profits in semiconductors. The third week in July, Fairchild increased the amount of the offer. Les revealed the new offer to Steve Levy of Motorola who told Les he was a fool not to accept it. Because of Levy's possible biased position (since in all likelihood he would inherit Hogan's job,) Les also discussed the matter with George Scalise. Initially, Levy requested that he be allowed to join Les Hogan at Fairchild resigning his position at Motorola.

Les flew to meet with the Fairchild Board of Directors on August 2, 1968 meeting with them on Saturday, August 3. At this board meeting Les was acompanied by his attorney. Les decided during the board meeting to accept the Fairchild offer and instructed his attorney to call him if Fairchild would generate the proper written documentation. He planned to resign from Motorola on Wednesday, August 7. Upon returning to Phoenix, Monday, he informed Steve Levy that he intended to resign. Levy suggested that he would like to go with him to Fairchild. Les Hogan said that no one is going with me. If you have any interest in working with Fairchild, you should call either Sherman Fairchild or Walter Burke. Three of the people who later went with Les actually called Sherman Fairchild and were offered positions conditional upon Les Hogan's accepting. Les flew to Chicago and discussed with Bob Galvin, Motorola Board Chairman, the situation with the intention of resigning. Bob offered Les the Presidency of Motorola if he would stay, however, Les indicated he had not gone to Chicago to negotiate.


-2-


According to Hogan, Mr. Galvin beacame somewhat irritated at his not accepting the Presidency of Motorola and said that he could not return to the Motorola plant. Les indicated that he wanted his personal check book and other belongings. Bob Galvin promised to have these delivered to Les Hogan's home. Apparently this was the beginning of an antagonistic type of relationship.

Hogan said that he had thoroughly reviewed the case with his lawyers, among the legal help is Jack Brown and others, a Phoenix law firm, who have been directed by Les to contact ICE. At present, Fairchild has requested from Motorola a complete list of the trade secrets which Motorola claims Les Hogan and others stole from Motorola. Forman Mueller, the Motorola attorney had indicated that it would take approximately three months to gather and document this data.

Les asked if we would accept the expert witness case at our usual fees and I said that we would be happy to do so.

Hogan has indicated that the Fairchild lawyer's feel that Motorola has no case in terms of the employment contracts. Then the only question becomes one of trade secrets. Les Hogan stated that he did not know any processing trade secrets which is likely, since he was never that directly involved with the actual fabrication of the devices. (The same statement of course, could probably not been made for the remainder of the people who left from Motorola to Fairchild.)

Hogan indicated that he would call the Phoenix lawyer on Wednesday, September 18, 1968 and that we should expect to hear from the Phoenix law firm.

In discussing the matter with Howard Dicken, it seemed that we could possibly be of some assistance to the lawyer in the proper interpretation of data and the actual preparation of the defense and then, of course, as actual expert witnesses should the case actually come to trial.

Since prior to being engaged to Fairchild, we had sent a letter to the Motorola attorney suggesting that he engage ICE to assist on the trade secret case, it appears that this offer might have to be withdrawn or possibly we just wait and see if Motorola comes back with any answer. There is, of course, the possibility of a conflict of interest if both sides should try to engage our services.

I suggest to Bill Farrow that he or I call Bill Drummond to discuss the matter briefly, and determine what action might be taken.


[signed]
______________________________
Glen R. Madland, President

GRM:mm


-3-


P.S.

Hogan mentioned in his conversation, that one of the few things the lawyers were afraid of is the Motorola customer list getting into the hands of Fairchild. Les and I both agreed that if Motorola and Fairchild would both list their customers as of January 1, 1968, they would probably come up with almost an identical list. Although in some industries, the customer list is quite confidential, this appears to be virtually impossible in the semiconductor and integrated circuit field.


[signed]
______________________________
Glen R. Madland, President

GRM:mm



The Trade Secret Case inventory list


[Letterhead]

March 3, 2005

Smithsonian Institution
National Museum of American History
10th St. & Constitution Ave. N.W.
Washington, D.C. 20560
Dear Sirs,
Enclosed is a document that I retrieved on-line from the Smithsonian and that I have never seen before. In this memo, which you keep on record, I am mentioned several times. However, the references to me and what I supposedly said are totally incorrect.

I do not doubt for an instant that Les Hogan told Glen Madland what Madland's memo reports. Unfortunately, at that point in time I believe Les Hogan stated thing in the manner that he believed to be in his best interest. Let me set the record straight.

1) I never suggested that I would like to join Hogan in going to Fairchild. About six months earlier Hogan had negotiated to go to General Instrument Co. as CEO and at that time I had agreed to join him. Hogan made peace with Bob Gavin of Motorola and agreed to stay at Motorola, as did I and some others. Part of the agreement to stray involved a promotion, a salary increase and th[e] promise of stock options. In return, I agreed and so did Hogan that we would never again engage in conspiracy to leave a group but that we certainly maintained the right as an individual to accept other employment if we chose to do so. When Hogan approached me about going with him to Fairchild, I reminded him of our promise and told him to please not discuss it with me any further. If he chose to leave and when he got to Fairchild, I would be happy to listen to any offer he thought would be of interest to me. I am sure I did tell him that I thought that the Fairchild offer to him was exceptional and that he should seriously consider taking it.

2) Hogan never said that "no one is going with me to Fairchild". He had been actively recruiting an entire management team. With in hours of his announced departure, seven senior management people at the Motorola Semiconductor Division announced their resignation. The[y] various reasons for their resignations but most did not honestly acknowledge the fact that they had agreed to go with Hogan to Fairchild. However, within days they were all at Fairchild.

3) For the record, I never had any interest in joining Hogan at Fairchild and I was disappointed that, in my opinion, he had failed to keep his word to Bob Gavin.

I would appreciate your filing this with the Glen Madland memo so that my side of the story is told.

Sincerely,

/s/

 
Stephen L. Levy
Mr. Levy's letter was received and recorded March 15, 2005
and posted March 19, 2005.
We hope to gather valid information to cross reference our material. However, we cannot change the existing records, though we can include corrections, comments and sources for expanding the information on our on-line presentation.

Thank You!
Smithsonianchips Webmaster


National Museum of American History


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