Sinyard believes that Choi and Forsman copied design elements of the Roubaix and of an unreleased Tarmac model, including seatstays passing the seat tube, overall shape, and paint scheme. He also believes that the name Venga was deliberately chosen for being close to the Venge, the name of an aero road bike Specialized had in development.
At the end of a trial lasting almost two weeks, a jury in Santa Clara County Superior Court found that Choi had breached his employment contract with Specialized by working on a competing company while still employed there. The judge had disallowed most of Specialized’s claims against Volagi’s owners, including interference in a contract and theft of intellectual property over Volagi’s LongBow Flex frame design for which Volagi received a patent in May 2011.
According to Volagi co-founder Forsman, the judge threw those claims out because Specialized could not show that any intellectual property had been stolen, nor could it show that it had suffered any damages from such a theft, had it taken place. The judge’s decision left the jury to decide only on the matter of breach of contract against Choi and Forsman, and it found for Specialized only in the case of Choi with an 11-1 decision, awarding damages in the amount of one dollar.
Demonstrating theft of trade secrets is hard to prove in a case like this if the only evidence is the final product itself, since almost every feature found in any current bicycle has been around a time or two in the past 100-plus years.
While inspiration for the Volagi bike could have come from many possible sources, it certainly could also have come from within Specialized, whose design teams run, as Capron says, “more like a federation of small businesses” that freely share information with each other while simultaneously running as separate entities.
Sharing ideas and information freely within its walls is a great way to run a company bent on innovation, but it also means that any employee has access to varying company secrets. This leaves the company open to employees using resources gained within the company for personal gain outside of the company. On balance, is it better to run this risk or to tightly hold information within each division?
Consider Apple and Sony, a company Apple co-founder Steve Jobs had most admired. Apple is reputed to have an open environment within the company. In the early part of last decade Sony had an MP3 player and owned a major record label, but as illegal file sharing decimated the music industry, Sony’s music division didn’t communicate with its electronics division. Consequently, it was Apple, not Sony, which first created the iPod music player and then the iTunes store, and the rest is history.
While on the witness stand, Sinyard likened Specialized to Apple, something that was later used against him by defense attorney Charles J. Smith in his closing statement.
Evoking Lloyd Bentsen’s famous quote, “I served with Jack Kennedy, I knew Jack Kennedy, Jack Kennedy was a friend of mine. Senator, you’re no Jack Kennedy” from his 1988 vice presidential debate with Dan Quayle, Smith closed with, “We know Apple Computer, we’ve worked around Apple Computer, Michael Sinyard, you are no Steve Jobs.”
Sinyard didn’t appreciate the sentiment any more than Quayle had, and he explained why he chose the Apple comparison. “You come into this room with this jury that thinks one bicycle is the same as the next bicycle. But if that were true, none of us (in the bike industry) would be doing what we’re doing. So I said we were like Apple so they could understand what we do.”