Jasmine Networks, Inc. v. Marvell Semiconductor, Inc., 117 Cal. App. 4th 794 (2004)

Marvell Semiconductor, Inc. and Jasmine Networks, Inc. are competitors in the business of designing and manufacturing telecommunications chips. Marvell offered to buy some of Jasmine’s technology, along with some of its engineers, and Jasmine accepted after negotiating a nondisclosure agreement preventing Marvell from obtaining Jasmine’s trade secrets or employees without paying for them. During the course of the parties’ negotiations, several of Marvell’s officers and lawyers inadvertently failed to hang up their speakerphone after leaving a message on Jasmine’s voicemail system – and proceeded to be recorded discussing their plan to steal Jasmine’s trade secrets and hire away its key employees. In response, Jasmine filed suit against Marvell, alleging misappropriation of its trade secrets; Marvell then filed a motion for a preliminary injunction, enjoining Jasmine from disclosing, disseminating or referring to the contents of the inadvertently recorded conversation on the grounds of attorney-client privilege. The trial court granted the motion, but the Court of Appeal reversed, holding that Marvell had waived the privilege by leaving the message on Jasmine’s voicemail system and, in any event, the crime-fraud exception to the attorney-client privilege barred its application in this case.