HP involved in another spying lawsuit

Judge orders counterclaim refiled; HP denies charges

Robert Mullins

January 25, 2007 (IDG News Service) -- A suit filed against Hewlett-Packard Co. by a former executive alleging that the company resorted to corporate spying over Dell Inc.'s plans to develop a line of printers must be resubmitted under a court seal, a federal judge ruled.

Karl Kamb Jr., who is being sued by HP on separate claims, accused HP of paying off a former Dell executive in Japan to reveal trade secrets on Dell's plans to enter the printer business. Dell had been a reseller of HP printers until it launched its own line of printers a few years ago. Printing and Imaging is one of HP's biggest and most profitable lines of business.

U.S. District Court Judge Michael Schneider yesterday ordered Kamb to withdraw his counterclaim against HP and to resubmit it under seal so that the contents would not be made public. The judge also issued a restraining order barring any parties to the case from discussing it with the media.

The message, "you do not have permission to view this document," popped up today when the link was clicked for the counterclaim on the Web site for access to federal court filings. The lawsuit was filed in the U.S. District Court for the Eastern District of Texas.

But news reports about the counterclaim said that Kamb accused HP of spying on him, including using pretexting to obtain his phone records.

Kamb is one of four former HP executives sued in 2005 by HP for conspiring to start a business to make and sell flat-panel TVs while they were supposed to be developing a flat-panel TV business for HP. HP's suit asks for $100 million in damages from the defendants.

"This counterclaim is wholly without merit," said HP in a prepared statement. "It's a blatant attempt to delay the prosecution of the original case against the persons filing the counterclaim. We intend to vigorously pursue our original claim and to defend ourselves against this action with equal vigor."

HP's statement continued: "The claim that pretexting was involved in this investigation is, to the best of our knowledge, patently untrue. Furthermore, as we've said in the past, HP strongly rejects such methods of investigation and has said that those methods will not again be employed on behalf of the company."

Kamb's attorney did not return a call seeking comment.

The allegation that HP spied on Kamb comes amid continued legal jeopardy for former HP executives and others in a pretexting scandal. In that case, former HP Chairman Patricia Dunn is among five defendants facing felony charges in California for conducting an investigation to identify the source of leaks from HP's board to the media. Private investigators hired by HP allegedly used false pretenses to get phone companies to reveal the calling records of people who were targets of the investigation.

One of the defendants in the state case, private investigator Bryan Wagner, pleaded guilty Jan. 12 in Federal District Court in San Jose to similar charges. His attorney is going to petition in State Superior Court in San Jose Friday for the state charges against Wagner to be dismissed.

The other defendants, including former HP attorney Kevin Hunsaker and two other detectives, have not responded publicly to reports that the state has offered a plea bargain in which five felony charges, including conspiracy, would be withdrawn, if they plead guilty to one misdemeanor count each.