WEBVTT - Nooks & Crannies 0:00:15.356 --> 0:00:20.676 Pushkin hold. 0:00:20.756 --> 0:00:25.756 Let's take a little bite here. One morning not long ago, 0:00:26.116 --> 0:00:28.596 my colleague bend ADF. Haffrey and I huddled in a 0:00:28.636 --> 0:00:32.276 small back room at Pushkin Industries to solve a mystery. 0:00:33.276 --> 0:00:35.356 It like hits the back of your palette. There's like 0:00:35.396 --> 0:00:37.196 aunt funk to it, you know what I mean. 0:00:38.116 --> 0:00:40.076 Through the glass wall of the room, we could see 0:00:40.076 --> 0:00:44.476 our fellow Pushkin nights working on various prosaic podcasts and 0:00:44.516 --> 0:00:50.676 audiobooks while we alone wrestled with an eternal question involving 0:00:51.956 --> 0:00:56.836 toasted bread. Just from a sensory perspective, there's a lot 0:00:56.876 --> 0:01:01.476 of crunch letten. Also, not forget its size. Yes, because 0:01:01.476 --> 0:01:05.436 it's palm, it's palmable. Breakfast is the meal you make 0:01:05.476 --> 0:01:08.796 when you're barely conscious, So the breakfast table is a 0:01:08.836 --> 0:01:12.476 super bowl for food companies. Lunch is eating out, Dinner, 0:01:12.516 --> 0:01:15.876 if you're lucky, is prepared from scratch. But think about breakfast. 0:01:16.436 --> 0:01:19.316 All the day lies before you and you are in 0:01:19.356 --> 0:01:23.756 need of sustenance. You want something wholesome but crucially easy. 0:01:24.276 --> 0:01:29.036 A little ready made breakfast foods become lifelong habits. Brands 0:01:29.076 --> 0:01:31.996 fight tooth and nail for a prime spot at that table. 0:01:32.436 --> 0:01:37.996 Many have fought valiantly. Cherios, lucky charms, pop tarts, rice crispies. 0:01:38.876 --> 0:01:42.836 But there's only one breakfast item legendary enough that when 0:01:43.316 --> 0:01:47.476 I take a bite, suddenly I remember my childhood. Also, 0:01:47.996 --> 0:01:50.636 how my father felt about cutting the cross off bread. 0:01:52.716 --> 0:01:54.756 He I think he viewed that as a kind of 0:01:54.916 --> 0:01:57.196 a sign of as it a kind of an a feat move, 0:01:58.556 --> 0:02:03.396 a side of moral weakness, moral instead of a lack 0:02:03.436 --> 0:02:05.396 of real kind of fiber when it came to eating 0:02:05.396 --> 0:02:08.276 your food. Or Ben takes a bite and suddenly he's 0:02:08.316 --> 0:02:10.916 off for the million time about proost. 0:02:11.556 --> 0:02:14.636 It does have that kind of like Pristian association thing, 0:02:14.676 --> 0:02:18.836 Like it tastes like this, I remember this taste. Yes, 0:02:18.876 --> 0:02:21.396 when I have this like it does take me back, 0:02:21.436 --> 0:02:25.316 like I am seeing my family's kitchen where we would 0:02:25.316 --> 0:02:27.436 eat breakfast, and like the big spread. 0:02:28.316 --> 0:02:31.996 Our breakfast mystery comes in packages of six, but they 0:02:32.076 --> 0:02:35.236 cannot be eaten right out of the box. Each item 0:02:35.276 --> 0:02:39.196 inside must be split in two, then toasted, then buttered 0:02:39.236 --> 0:02:42.316 for the magic to work. And oh, the magic works. 0:02:43.196 --> 0:02:48.276 I'm talking, of course, about Thomas's English muffins, the most 0:02:48.516 --> 0:02:51.876 iconic breakfast bread of all time. 0:02:54.276 --> 0:02:57.876 And for that reason it is nearly a half a 0:02:57.956 --> 0:03:00.996 billion dollars a year in sales product. It is the 0:03:01.036 --> 0:03:06.716 cinequonn of bread products, baked goods. Yeah, the champ undisputed. 0:03:08.076 --> 0:03:10.756 What sets that thomas Is English muffin apart from all 0:03:10.756 --> 0:03:15.276 the others. It says right there on the package Knooks 0:03:15.956 --> 0:03:19.916 and Cranny's. The recipe for Thomas's English muffin has been 0:03:20.036 --> 0:03:22.476 one of the most closely held trade secrets there is, 0:03:23.556 --> 0:03:28.836 until allegedly one baking executive tried to make off with 0:03:28.876 --> 0:03:34.956 the family jewels. I'm Malcolm Gladwell. You're listening to Revisionist History, 0:03:35.196 --> 0:03:39.156 my show about things overlooked and misunderstood. Today on the show, 0:03:39.396 --> 0:03:42.476 Ben and Alf Haffrey peers into the nooks and crannies 0:03:42.756 --> 0:03:45.476 of one of the greatest legal cases you've never heard of. 0:03:46.396 --> 0:03:50.316 It's a big story, this muffin case. Today you're getting 0:03:50.356 --> 0:03:51.676 part one. 0:03:55.436 --> 0:03:58.756 Here's Ben. I once hired a lawyer who dreams about 0:03:58.836 --> 0:04:01.436 suing people. He told me this on a call once. 0:04:01.756 --> 0:04:04.116 I asked for proof, and he showed me a video 0:04:04.156 --> 0:04:08.396 of himself asleep, very clearly muttering I'll sue you, and 0:04:08.476 --> 0:04:10.956 something to the effect of you're going to jail. There 0:04:10.996 --> 0:04:13.676 were some swears in there too. My first thought was 0:04:14.196 --> 0:04:17.356 this man is the best lawyer I'll ever have. Second thought, 0:04:17.876 --> 0:04:20.556 I better pay him quickly. We were going over an 0:04:20.596 --> 0:04:24.076 employment contract. We got to the part about intellectual property, 0:04:24.516 --> 0:04:26.596 and I thought the degree to which an employer could 0:04:26.596 --> 0:04:28.596 punish you if you ever divulged one of their trade 0:04:28.636 --> 0:04:33.276 secrets seemed a little crazy, to which my lawyer replied, well, 0:04:33.436 --> 0:04:36.916 it's took some crannies. And even recognizing I was paying 0:04:36.956 --> 0:04:41.636 by the second, I was like, what did you just say? 0:04:41.956 --> 0:04:44.236 Why have so many of you switched from toast at 0:04:44.276 --> 0:04:47.836 Thomas's English muffins? Definitely the cranny. 0:04:47.876 --> 0:04:51.636 It was the nooks. The key to English muffins supremacy 0:04:51.756 --> 0:04:54.396 comes down to the balance of nooks which catch and 0:04:54.436 --> 0:04:57.356 pool the melted butter and the thin, crisp walls of 0:04:57.396 --> 0:05:01.476 the crannies. But somehow nooks and crannies are now lawyer 0:05:01.556 --> 0:05:03.476 shorthand for trade secret. 0:05:04.236 --> 0:05:09.116 Why Thomas's the nooks and Cranny's muffin making breakfast better? 0:05:09.316 --> 0:05:15.196 For over one hundred years. In eighteen seventy four, a 0:05:15.236 --> 0:05:18.956 baker named Samuel bath Thomas left England for the United States. 0:05:19.836 --> 0:05:22.596 Little's known about his life before he lands in New York, 0:05:22.716 --> 0:05:25.396 but he arrived with the recipe in his pocket for 0:05:25.516 --> 0:05:29.276 what typically would be called Welsh muffins or crumpets. He 0:05:29.356 --> 0:05:31.836 cooked them on a griddle so they'd be crisp on 0:05:31.916 --> 0:05:35.636 the outside and dowe yet pockmarked in the inside in 0:05:35.676 --> 0:05:39.236 a way few other breads were Thomas's. Nooks and Crannies 0:05:39.556 --> 0:05:44.396 took New York by storm, demands skyrocketed. He opened another bakery, 0:05:44.756 --> 0:05:48.836 then it became a corporation. Eventually the words Nooks and 0:05:48.876 --> 0:05:53.676 Crannies became a registered trademark of Thomas's English muffins. You 0:05:53.716 --> 0:05:55.636 will note, if you look at the bakery shelves at 0:05:55.676 --> 0:05:58.836 your local grocery store, that other English muffin brands live 0:05:58.916 --> 0:06:02.076 in fear of this fact. Dave's Killer Bread boasts of 0:06:02.116 --> 0:06:07.236 butter catching flavor craters, Trader Joe's has pockets and crevices. 0:06:07.796 --> 0:06:10.476 Bays has raised the white flag and left the field 0:06:10.636 --> 0:06:15.476 entirely with a claim about packaging now resealable, because all 0:06:15.476 --> 0:06:18.396 of them know better than to cross the entity that 0:06:18.596 --> 0:06:24.036 now owns Thomas's group. O Bimbo, did you know that 0:06:24.076 --> 0:06:26.036 your bread is owned by Mexico. 0:06:26.356 --> 0:06:29.596 CNBC's Michelle Ruzcoberra caught up with the nation's largest bakery, 0:06:29.636 --> 0:06:30.396 GROUPO Bimbo. 0:06:31.076 --> 0:06:33.756 GROUPO Bimbo International Baking. 0:06:33.476 --> 0:06:38.876 Conglomerate Entemens owned by a Mexican bread company, Sarah Lee 0:06:39.316 --> 0:06:41.276 bought by a Mexican bread company. Group of Bimbo is 0:06:41.356 --> 0:06:42.556 just the biggest baker in the United States. 0:06:42.596 --> 0:06:45.036 It is the biggest baker in the entire world. 0:06:46.276 --> 0:06:49.996 Bimbo is everywhere. They've taken over half the bread brands 0:06:50.036 --> 0:06:52.756 you've heard of in fifty percent of the rest. They've 0:06:52.796 --> 0:06:55.916 swept through the US, acquiring one bakery after another. 0:06:56.636 --> 0:06:59.316 It's the first bakery with a big national footprint, and 0:06:59.356 --> 0:07:00.396 they plan to be global. 0:07:01.476 --> 0:07:04.316 No one stands in the way of GROUPO Bimbo. And 0:07:04.396 --> 0:07:06.836 in two thousand and nine, at the height of their powers, 0:07:07.276 --> 0:07:11.276 they acquired the holy Grail of baked goods, the Nooks 0:07:11.316 --> 0:07:12.276 and Crannies. 0:07:12.396 --> 0:07:15.436 Thomas's English Muffins, owned by a Mexican bread company. 0:07:16.356 --> 0:07:19.196 The secret recipe for Nooks and Crannies brought in about 0:07:19.236 --> 0:07:22.116 half a billion dollars in annual revenue to Group of Bimbo. 0:07:22.876 --> 0:07:26.996 But then, according to Bimbo, someone tried to steal it. 0:07:29.996 --> 0:07:33.196 Can you just tell me the the basic facts of 0:07:33.236 --> 0:07:33.676 the case. 0:07:34.276 --> 0:07:37.316 Well, in this case, I guess we can go through it. 0:07:37.676 --> 0:07:40.836 I'm speaking with Louis del Judice, partner at the major 0:07:40.916 --> 0:07:45.236 law firm Troutman Pepperlock, in a conference room high above Manhattan. 0:07:45.956 --> 0:07:48.236 This is where my lawyer sent me when I asked 0:07:48.236 --> 0:07:52.156 about cranny law. Louis is an expert in intellectual property. 0:07:52.636 --> 0:07:54.476 He says a lot of people come to him to 0:07:54.556 --> 0:07:57.356 determine if they have their own trade secrets, and he 0:07:57.436 --> 0:08:00.676 tells them, sit down, my friends, and let me teach 0:08:00.716 --> 0:08:02.756 you the lessons of the muffin. 0:08:03.396 --> 0:08:05.476 Do you know with one of the best kept trade secrets? 0:08:05.476 --> 0:08:08.116 And everybody thinks coke, And I'm like, well, Thomas is 0:08:08.156 --> 0:08:10.636 English muffins, which we've all grown up on. There's only 0:08:10.716 --> 0:08:12.596 ten people in the world that know how to make it. 0:08:12.676 --> 0:08:13.756 Thomas's English muffin. 0:08:13.756 --> 0:08:17.476 And people go, what, Actually it's fewer than ten. But 0:08:17.556 --> 0:08:20.116 we'll get to that. Trade secrets are one of the 0:08:20.116 --> 0:08:24.316 pillars of IP protection in the United States, along with patents, trademarks, 0:08:24.316 --> 0:08:28.556 and copyright. But unlike the others, a trade secret never expires, 0:08:29.156 --> 0:08:31.876 and the muffin case is one of the best examples 0:08:31.956 --> 0:08:34.756 of a trade secret's power. And how to protect it. 0:08:35.316 --> 0:08:38.196 Louis was not involved in the case directly, but he's 0:08:38.196 --> 0:08:41.956 studied it at length. In any telling, he begins by 0:08:41.996 --> 0:08:47.796 introducing the defendant, a former GROUPO Bambo employee named Chris Boticella. 0:08:47.996 --> 0:08:51.196 Executive officer. He's in charge of the entire West Coast, 0:08:51.356 --> 0:08:54.516 United States, and he's privy to all this information, all 0:08:54.556 --> 0:08:57.836 the recipe books, and all of this other financial information 0:08:58.156 --> 0:09:02.156 and efficiencies. He has to sign a non disclosure agreement, 0:09:02.316 --> 0:09:05.036 but that non disclosure agreement's only well he's employed. 0:09:07.156 --> 0:09:10.876 It's twenty ten, the year after Group of Bembo acquired Thomas's. 0:09:11.636 --> 0:09:15.196 According to documents presented in court, the information required to 0:09:15.236 --> 0:09:18.876 produce a Thomas's English muffin is known by only seven 0:09:18.916 --> 0:09:22.356 people at the company. It's kept in secret codebooks that 0:09:22.476 --> 0:09:25.716 only a few people have access to. Babachella, as a 0:09:25.756 --> 0:09:29.756 senior executive, is one of those people. He oversees a 0:09:29.796 --> 0:09:33.996 facility in Placentia, California, where the muffins are made. He's 0:09:33.996 --> 0:09:36.316 been in the industry since he was sixteen and has 0:09:36.436 --> 0:09:39.956 risen through the ranks through sheer skill till finally he's 0:09:39.956 --> 0:09:45.756 reached the pinnacle. Bimbo bakery's executive of almost a decade, 0:09:45.916 --> 0:09:49.196 but lately Chris has been unhappy. 0:09:50.476 --> 0:09:52.996 He had said that they had done some cost cutting 0:09:52.996 --> 0:09:55.716 and some head cutting, so that sort of left the 0:09:55.756 --> 0:09:58.356 bad taste in his mouth. It sounded like, from the 0:09:58.356 --> 0:10:01.636 one email that's attached to the complaint that maybe had 0:10:01.676 --> 0:10:04.636 a little bit of a friction with his manager, you know, 0:10:04.676 --> 0:10:07.396 the guy above him. He's just like, you know, there's 0:10:07.436 --> 0:10:09.196 a line that literally says, you know, you and I 0:10:09.116 --> 0:10:11.916 I may not have always nine to I, but we've 0:10:11.956 --> 0:10:14.116 always known what was best for the company. So when 0:10:14.156 --> 0:10:16.916 you read that, you know, that's a polite way of 0:10:16.956 --> 0:10:19.316 saying you and I used to fight a lot. 0:10:19.596 --> 0:10:23.916 Chris gets a job offer at Hostis, famed owner of Twinkies, 0:10:24.436 --> 0:10:28.876 one of Bambo's only competitors, but just barely. Hostess had 0:10:28.876 --> 0:10:31.956 just gone through bankruptcy. Hostess was a possible target for 0:10:31.996 --> 0:10:35.116 Bambo acquisition, but then Bimbo would have owned almost every 0:10:35.156 --> 0:10:37.476 bake good on the planet, and at that point, where's 0:10:37.516 --> 0:10:40.836 the fun. Chris probably knew that group of Bimbo wasn't 0:10:40.836 --> 0:10:42.596 going to be thrilled about the Hostess of it all, 0:10:43.036 --> 0:10:45.316 But he wants to get his year end bonus so 0:10:45.356 --> 0:10:46.436 he doesn't leave right away. 0:10:47.116 --> 0:10:50.996 So now he's sitting all through Q four at his 0:10:51.116 --> 0:10:54.116 role with Thomas's getting all the Q four information, all 0:10:54.116 --> 0:10:57.676 the look foward information for the next year, all the financials, 0:10:57.796 --> 0:10:59.996 on top of all the other knowledge he had. 0:11:01.236 --> 0:11:04.876 Chris signs with Hostess in October. His start date is January. 0:11:05.316 --> 0:11:08.796 The weeks stick by, Chris finally announces he's leaving Bimbo, 0:11:09.196 --> 0:11:11.076 but he doesn't say he's going to a new job. 0:11:11.516 --> 0:11:14.916 Given his long tenure, his colleagues probably assume he's retiring. 0:11:15.276 --> 0:11:18.076 According to court documents, he asks about how to enroll 0:11:18.076 --> 0:11:18.916 in health coverage. 0:11:19.356 --> 0:11:22.276 Oh, I need cobra, meaning like that's code word for 0:11:22.316 --> 0:11:24.756 like I'm going to retire. Almost right, but. 0:11:24.796 --> 0:11:27.756 Then Hostess puts out a press release. 0:11:28.036 --> 0:11:30.916 They helped find out about Host's press release that he's 0:11:30.956 --> 0:11:33.076 going to work in the next two days. 0:11:32.756 --> 0:11:35.916 For Hostess, and Bembo's like, oh shit. 0:11:36.436 --> 0:11:38.956 We've got this seventy five year old plus secret of 0:11:39.036 --> 0:11:41.676 how to bake Thomas's English muffins. It's a half a 0:11:41.676 --> 0:11:44.196 billion dollar product and he knows it. 0:11:44.676 --> 0:11:48.316 Does Hostess have an English muffin? Not yet? Fuck HR calls. 0:11:48.196 --> 0:11:50.756 Chris, no, no, you weren't retiring. You were going to 0:11:50.796 --> 0:11:51.796 the hated competitor. 0:11:52.436 --> 0:11:54.676 This is bad, Hr says, get out. 0:11:54.996 --> 0:11:57.636 Now, he got to a certain point where he knew 0:11:57.676 --> 0:11:59.676 too much and now he's iced out. 0:12:00.356 --> 0:12:03.276 Chris is walked out of the building. He has no 0:12:03.356 --> 0:12:06.756 idea what's coming for him, least of all that he's 0:12:06.796 --> 0:12:11.076 about to be swallowed up by the k Nooks and grannies. 0:12:12.796 --> 0:12:18.476 We'll be right back. We're going to return to the 0:12:18.556 --> 0:12:22.396 Knoks and grannies, I promise. But first we have to 0:12:22.436 --> 0:12:24.196 talk about Willy Wonka. 0:12:24.716 --> 0:12:28.036 So I'll start by saying that one of my favorite 0:12:28.156 --> 0:12:31.436 books as a kid was Roald Dahl's Charlie and the 0:12:31.516 --> 0:12:32.356 Chocolate Factory. 0:12:32.916 --> 0:12:35.276 Genie C. Fromer is a Weis dean at the New 0:12:35.356 --> 0:12:38.876 York University Law School. She's also the Walter J. Derenberg 0:12:38.916 --> 0:12:42.916 Professor of Intellectual Property Law and the scholar of Charlie 0:12:42.956 --> 0:12:43.956 and the Chocolate Factory. 0:12:44.316 --> 0:12:47.396 When my kids were younger, I was rereading the book 0:12:47.476 --> 0:12:51.876 to them, and I was struck, now that I was 0:12:51.916 --> 0:12:55.796 working in intellectual property, by how much of the story 0:12:55.956 --> 0:13:00.596 was actually driven by trade secrets, in that Willy Wonka 0:13:01.236 --> 0:13:03.916 had had to shut down his factory because all of 0:13:03.956 --> 0:13:07.916 his competitors were sneaking in spies to work there so 0:13:07.956 --> 0:13:11.916 they could steal his us and candy innovations, and he 0:13:11.956 --> 0:13:14.716 couldn't tolerate it as a business matter anymore, so he 0:13:14.796 --> 0:13:15.276 shut down. 0:13:17.116 --> 0:13:19.556 For those in need of a refresher. In the book, 0:13:19.796 --> 0:13:23.756 Wonka's Factory has started back up, but nobody understands how. 0:13:24.196 --> 0:13:27.316 Nobody ever goes in, nobody ever comes out. This is 0:13:27.316 --> 0:13:29.876 why it's so exciting when Charlie gets the golden ticket 0:13:29.916 --> 0:13:32.756 to go see the inside of the factory. Nobody sees 0:13:32.796 --> 0:13:33.916 the inside of the factory. 0:13:34.356 --> 0:13:37.796 And so what we learn is that Willy Wonka has 0:13:37.836 --> 0:13:42.436 found the magical solution to trade secret theft by having 0:13:42.636 --> 0:13:45.276 umpa lumpas work in the factory. Why are they the 0:13:45.316 --> 0:13:50.076 magical solution because they don't leave. They live there, so 0:13:50.116 --> 0:13:53.316 they're not going to be sneaking out any trade secrets. 0:13:53.316 --> 0:13:57.556 They're paid in chocolate. They're happy. Let's not talk about 0:13:57.556 --> 0:14:00.476 the some of the racists and other aspects. 0:14:00.396 --> 0:14:06.876 Maybe in a viohilation of some employment law, but it's totally. 0:14:10.996 --> 0:14:14.076 Genie's insight about the umpa lumpas became the seed of 0:14:14.116 --> 0:14:17.356 not one, but two brilliant articles. She wrote, using Willy 0:14:17.436 --> 0:14:21.196 Wonka as the skeleton key for understanding trade secrecy. Her 0:14:21.236 --> 0:14:26.036 major revelation, Willi Wanka's paranoia, the spying and extreme secrecy 0:14:26.596 --> 0:14:30.996 was totally justified. It was essentially based on a true story. 0:14:31.116 --> 0:14:33.076 This is just part of being in the candy industry. 0:14:33.996 --> 0:14:39.156 Everything from reading about the Mars company blindfolding any repair 0:14:39.236 --> 0:14:41.716 people that would come into fixed machines so they wouldn't 0:14:41.716 --> 0:14:46.556 see anything else, to spies being put into factories and 0:14:46.596 --> 0:14:49.756 guarding against that. So it felt actually very true to life, 0:14:49.756 --> 0:14:51.836 and that was a little bit shocking to me. 0:14:52.796 --> 0:14:55.636 Trade secrecy is the part of the law where life 0:14:55.636 --> 0:14:58.316 begins to resemble Willy Wonka. 0:14:58.436 --> 0:15:01.276 This is the most secret machine in my entire factory. 0:15:03.116 --> 0:15:04.196 What's it do? 0:15:04.316 --> 0:15:04.876 Cat you see? 0:15:04.916 --> 0:15:06.516 It makes everlasting gobstoppers? 0:15:06.636 --> 0:15:10.516 Did you see? People love secrets from a very early age. 0:15:10.996 --> 0:15:13.556 It's why Charlie in the Chocolate Factory is a classic 0:15:13.676 --> 0:15:17.436 children's story. It's not just the candy, it's the secrets. 0:15:17.956 --> 0:15:20.516 The world is already full of things you can't understand 0:15:20.556 --> 0:15:22.916 when you're little, and now someone's going to share the 0:15:22.956 --> 0:15:29.036 most special, true knowledge behind it all. But secrets are 0:15:29.036 --> 0:15:32.196 also dangerous. If I tell you a secret. It means 0:15:32.236 --> 0:15:35.476 I trust you. It binds us together, but it also 0:15:35.556 --> 0:15:38.836 alters the balance of power between us. You know something 0:15:38.996 --> 0:15:41.556 I don't want other people to know. That puts me 0:15:41.676 --> 0:15:44.596 at risk. So I need you to know it's a secret. 0:15:44.956 --> 0:15:48.156 I tell you, don't tell anyone before I whisper in 0:15:48.196 --> 0:15:50.676 your ear. I put up a sign on my bedroom 0:15:50.716 --> 0:15:55.556 door saying top secret, keep out. Trade secrecy works on 0:15:55.596 --> 0:15:56.516 playground rules. 0:15:57.516 --> 0:15:59.556 I can only give them to you if you solemnly 0:15:59.596 --> 0:16:02.916 swear to keep them for yourselves and never show them 0:16:02.956 --> 0:16:08.076 to another living soul as long as you all shall live, agreed, aguly. 0:16:10.516 --> 0:16:13.236 Now imagine I'm a major corporation in the real world. 0:16:13.836 --> 0:16:17.396 I'm infinitely more powerful than you. I'm Willie Wonka and 0:16:17.436 --> 0:16:20.076 you are an oo ballompa. I tell you a secret, 0:16:20.236 --> 0:16:22.356 maybe one you don't even want to know. And then 0:16:22.356 --> 0:16:25.396 I say, by the way, I have eyes everywhere, and 0:16:25.436 --> 0:16:27.716 if you breathe a word of this secret to anyone, 0:16:27.916 --> 0:16:30.316 or even look as if you might breathe a word, 0:16:30.756 --> 0:16:33.796 I will destroy you. This is the crux of it. 0:16:34.556 --> 0:16:38.516 At their best, trade secrets protect valuable intellectual property from 0:16:38.556 --> 0:16:42.516 being stolen. But at their worst, they're a powerful tool 0:16:42.556 --> 0:16:46.076 for a company that wants to turn an employee into 0:16:46.076 --> 0:16:50.076 an oo ballompa. It used to be the easiest way 0:16:50.116 --> 0:16:52.476 to turn a human being into an oop ballompa was 0:16:52.476 --> 0:16:56.596 a non compete clause. But Janie says that's going away. 0:16:57.356 --> 0:17:00.916 We've been living in a world where fast food workers 0:17:01.236 --> 0:17:04.916 have been asked to sign non compete agreements, and you know, 0:17:05.116 --> 0:17:09.396 historically people understood non compete as being for the a 0:17:09.516 --> 0:17:12.516 small number of employees, the highest level employees, the ones 0:17:12.516 --> 0:17:16.756 with the access to the most sensitive information, And they're 0:17:16.836 --> 0:17:21.516 just being deployed as form contracts for so many workers 0:17:21.916 --> 0:17:26.396 and workers with lower incomes in ways that are keeping 0:17:26.436 --> 0:17:29.716 them in jobs that they might want to leave and 0:17:29.756 --> 0:17:30.516 go somewhere else. 0:17:31.196 --> 0:17:33.676 A lot of states are banning non competes now, which 0:17:33.716 --> 0:17:35.516 is one of the reasons a company might come to 0:17:35.556 --> 0:17:39.076 Louis del Judy's IP expert to help identify and protect 0:17:39.116 --> 0:17:42.036 their secrets. Could you make that bit in a secret room? 0:17:42.516 --> 0:17:45.116 Can you have a black vault in the office. Could 0:17:45.156 --> 0:17:46.436 there be a secret codebook? 0:17:46.716 --> 0:17:50.356 Because a trade secret will be the only way to 0:17:50.396 --> 0:17:53.836 stop somebody if you really think they're taking something that's 0:17:53.916 --> 0:17:57.956 proprietary to your company someplace else. Because a non compete 0:17:57.996 --> 0:17:59.316 is not going to really be in play. 0:18:00.396 --> 0:18:03.116 But trade secrets can have a dangerous power. 0:18:03.836 --> 0:18:08.076 Sometimes people are just good at what they do, and 0:18:08.196 --> 0:18:10.956 they have advantages to continue working in the same industry 0:18:11.036 --> 0:18:15.236 because they know that industry and their business has over 0:18:16.316 --> 0:18:21.316 claimed things of secrets, and that might prevent them from 0:18:21.476 --> 0:18:22.436 taking another job. 0:18:23.556 --> 0:18:27.236 Trade secrets are the only intellectual property protection that can 0:18:27.316 --> 0:18:30.876 last forever, and because of that permanence and the way 0:18:30.956 --> 0:18:33.876 we're geared to think about secrets already, they have a 0:18:33.956 --> 0:18:38.876 kind of mystical aura in our secular, disenchanted world. They 0:18:38.876 --> 0:18:43.476 are the closest thing we have to magic. The authentic 0:18:43.596 --> 0:18:46.476 Coca Cola formula is written by the tiny grain of 0:18:46.596 --> 0:18:50.236 rice kept in an old liking chest, or cursed on 0:18:50.436 --> 0:18:54.156 anyone who opens it. The most famous ones are the recipes, 0:18:54.596 --> 0:18:59.396 Coca Cola's secret formula, KFC's eleven spices, the exact way 0:18:59.396 --> 0:19:02.356 to create Wrigley's gum. But actually a whole lot of 0:19:02.356 --> 0:19:06.116 things can be trade secrets, software code, financial information. You 0:19:06.156 --> 0:19:08.676 may know a trade secret and not even totally realize it, 0:19:10.756 --> 0:19:13.796 but a good way to recognize one is the nooks 0:19:13.836 --> 0:19:17.596 and crannies test. This feels like a good transition to 0:19:17.676 --> 0:19:21.516 me to Bimbo Bakeries versus Banchella. Can you tell me 0:19:22.756 --> 0:19:26.116 how you came across the case and how you teach it. 0:19:26.196 --> 0:19:30.676 I know the case through working on trade, seper scholarship, 0:19:30.716 --> 0:19:33.716 and teaching. It's a more recent classic. 0:19:33.756 --> 0:19:40.476 I would say, Bimbo Bakeries versus Boutchella. It seemed like 0:19:40.596 --> 0:19:43.836 every lawyer I talked to knew about the case. It 0:19:43.876 --> 0:19:46.636 wasn't a precedent so much as a legend, a piece 0:19:46.676 --> 0:19:49.876 of lore, a fairy tale warning about the Umpah Lumpa 0:19:49.916 --> 0:19:53.956 who took the everlasting gobstopper out of Willy Wonka's factory 0:19:54.516 --> 0:19:57.436 and tried to sell it to a competitor. Like any 0:19:57.476 --> 0:19:59.916 good fairy tale, it's a good teaching tool because the 0:19:59.996 --> 0:20:05.316 moral's clear, except and I realized the lessons of this 0:20:05.436 --> 0:20:17.716 case aren't clear at all. If somehow you missed the 0:20:17.716 --> 0:20:21.916 twenty seventeen edition of the Pennsylvania Super Lawyers magazine, I 0:20:21.916 --> 0:20:24.956 would encourage you to look it up, specifically an article 0:20:24.996 --> 0:20:28.516 titled I Can Do That about a Pennsylvania super lawyer 0:20:28.796 --> 0:20:33.396 named Elizabeth Ainsley. Liz Ainsley is Fearless. She was head 0:20:33.396 --> 0:20:36.876 of the Eastern District of Pennsylvania's fraud team, A super 0:20:36.956 --> 0:20:40.916 lawyer's magazine puts it quote. Ainsley has represented whistleblowers in 0:20:40.956 --> 0:20:44.876 several major cases, defended and prosecuted high profile RICO cases 0:20:44.916 --> 0:20:48.396 against law firms and pharmaceutical companies, defended a major national 0:20:48.436 --> 0:20:51.756 bank in a lender liability trial, and successfully defended The 0:20:51.796 --> 0:20:56.516 New York Times in a federal defamation trial. End quote legend. 0:20:57.276 --> 0:21:00.036 And yet in that whole article they don't mention a 0:21:00.036 --> 0:21:03.316 call she got sometime in January twenty ten regarding a 0:21:03.356 --> 0:21:05.756 secret recipe for English muffins. 0:21:05.996 --> 0:21:09.436 It was a pretty small budget to begin with, and 0:21:09.516 --> 0:21:11.236 I was at a big firm, so there was some 0:21:11.356 --> 0:21:14.116 question about whether I could take it or not. But 0:21:14.356 --> 0:21:15.636 they let me take it. 0:21:15.716 --> 0:21:18.396 When you say let you take it, were you eager 0:21:18.516 --> 0:21:20.116 to take it? Yeah? 0:21:20.476 --> 0:21:22.756 It was an interesting case. It was kind of a 0:21:23.116 --> 0:21:27.916 David and Goliath situation. I thought people ought to be 0:21:27.996 --> 0:21:33.596 free to move from one employer to another, and Chris 0:21:33.676 --> 0:21:35.476 seemed to be. 0:21:35.996 --> 0:21:36.796 Out of his desk. 0:21:36.916 --> 0:21:37.116 Wow. 0:21:37.196 --> 0:21:43.916 So well, he was a single person and being sued 0:21:43.956 --> 0:21:46.396 by a huge. 0:21:46.276 --> 0:21:48.796 Corporation, global conglomerate. 0:21:48.196 --> 0:21:51.676 As with the deepest of pockets. 0:21:53.316 --> 0:21:56.876 Chris Boticella as I have mentioned, was in trouble. Bimbo 0:21:56.956 --> 0:21:59.836 Bakeries has just found out that one of seven employees 0:21:59.876 --> 0:22:02.596 who knew the secret recipe for their newly acquired and 0:22:02.636 --> 0:22:06.156 extremely valuable Thomas's English Muffins was going to work for 0:22:06.236 --> 0:22:09.076 a competitor. Group of Bimbo is one of the large 0:22:09.236 --> 0:22:12.476 bakeries in the world. Group of Bimbo bows to nobody. 0:22:12.996 --> 0:22:16.156 So within days of Chris's termination, before he starts his 0:22:16.156 --> 0:22:19.956 new job at Hostess, attorneys for Bimbo file an injunction 0:22:20.076 --> 0:22:23.796 in a Pennsylvania court, which is technically where Thomas's is based, 0:22:24.116 --> 0:22:26.196 but mainly it's a way better place for them to 0:22:26.276 --> 0:22:29.556 argue the case than California. I would like to read 0:22:29.556 --> 0:22:32.756 to you from the factual allegation section of what they filed. 0:22:33.356 --> 0:22:36.036 Items one through ten cover the basics of the case, 0:22:36.916 --> 0:22:40.756 and then they get to the secret. BBU and its 0:22:40.756 --> 0:22:43.796 predecessors have gone to great lengths to keep secret the 0:22:43.876 --> 0:22:47.476 recipe and process for making Thomas's English Muffins for over 0:22:47.556 --> 0:22:52.276 seventy five years. Thomas's English Muffins are a unique product, 0:22:52.356 --> 0:22:56.116 famous for their distinctive nooks and cranny's characteristics. As a 0:22:56.156 --> 0:22:59.796 result of his employment Bodicella learned trade secrets relating to 0:22:59.836 --> 0:23:03.396 the production of the Thomas's English muffins, including not only 0:23:03.436 --> 0:23:07.316 its recipe, but also the equipment necessary for production, necessary 0:23:07.356 --> 0:23:10.236 moisture level, and the way the product is baked, which 0:23:10.236 --> 0:23:15.236 all contribute to its distinctive characteristics. With the knowledge described 0:23:15.276 --> 0:23:19.036 in paragraph thirteen, Vodicella could produce an English muffin that 0:23:19.156 --> 0:23:22.276 might look a bit different, but that would nevertheless possess 0:23:22.356 --> 0:23:26.156 the distinctive taste, texture, and flavor character that distinguished the 0:23:26.196 --> 0:23:29.996 Thomas's English muffins and that have been the foundation of 0:23:30.076 --> 0:23:36.276 the product's success. End quote. If you're Chris, this. 0:23:37.236 --> 0:23:37.956 Is bad. 0:23:40.596 --> 0:23:42.716 Because you have to The judge is coming to this. 0:23:42.716 --> 0:23:47.156 Cold Louis del Judice partner Troupman Pepper Locke muffin trade 0:23:47.196 --> 0:23:48.196 secret enthusiast. 0:23:48.436 --> 0:23:50.756