May 25, 2007
On Wednesday a federal judge sentenced the secretary accused of trying to sell Coke's trade secrets to eight years in prison, a sentence longer than that recommended by the sentencing guidelines. Apparently the judge was not only concerned about the secretary's failure to acknowledge her conduct, but also about sending a message concerning the severity of these kinds of offenses. Interestingly, of course, it was Pepsi that alerted Coke about the crime after receiving a letter offering to sell Coke's trade secrets to the highest bidder. I was intrigued by this case not only because it is like a great spy novel, but also because I was trying to figure out how to assess Pepsi's actions. To be sure, one could argue that this is an instance of Pepsi behaving in a responsible manner. (It is here that I have to admit that I a Pepsi drinker, and from that perspective, I am relieved that Pepsi "did the right thing.") But there are other ways to view Pepsi's conduct. A Forbes article has a great take on Pepsi's motives. The article notes that while Pepsi may have been motivated by a sense of corporate responsibility and fairness, Pepsi has been gaining ground on Coke in many areas and hence Pepsi has no need to look to its competitor for new ideas. Thus, there was no real tension between fairness and profit. Regardless of its motive, I think it is fair to say that both Coke and Pepsi appreciate the sentiment behind the judge's sentencing because it seems to support companies' efforts to vigorously protect their trade secrets.
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