Legal Pad

New Netapp GC Hails from JDS

[Amy Miller]

When Netapp, Inc. needed a new top lawyer to replace Andy Kryder, who retired after serving as general counsel for 10 years, it didn’t have to look far.

The Sunnyvale data management and storage company hired Matthew Fawcett, who had been general counsel for Milipitas-based JDS Uniphase for 11 years.

Now Fawcett leads NetApp’s worldwide legal team and reports to president and CEO Tom Georgens.

Tesla Takes Its First Steps (IPO Steps, That Is)

Tesla is going public! Wait. Does this mean they have to start making electric cars that actually work?

This development is good and bad news for local lawyers. Good news for Larry Sonsini — erstwhile Tesla board member and current legal adviser  — and his firm, which will be handling the IPO.

Bad news for Jon Sobel, who took the job as top Tesla lawyer just a few months ago (free reg. req.). According to the luxury electric car company’s first public filing, Sobel resigned in December — just three months after he was hired. The fact that Sobel left was first noted by the Daily Journal.

The company doesn’t provide any information on why Sobel, the former Yahoo GC, resigned. But it does provide his salary information.

Sobel would have been paid $300,000 year, but the big deal would have been the option to buy 400,000 shares of Tesla stock at two bucks a pop. Now he won’t get a bite of the public offering. Sobel and Tesla are still ignoring my calls on the thing.

Two questions about Sobel leaving: Is this going to end like it did with Tesla co-founder Martin Eberhard? That is, badly and with a lot of litigation (free reg. req.).

And two, does this mean that the most eligible bachelor in the Bay Area legal community, Craig Harding (who was demoted when Sobel was hired), is back in the driver’s seat?

— Zusha Elinson

Facebook GC Cleans Up Nice, Talks About Online Privacy

Famous general counsel gathered to discuss the issues of the day at GC West at the Fairmont Hotel, an event put on by our beneficent corporate parent ALM. Relatively new Facebook GC and former Bush White House lawyer Ted Ullyot, looking remarkably un-Facebooky in a crisp jacket shirt and tie and impeccably combed hair, was there to talk about Internet privacy. Facebook, of course has faced its share of privacy “challenges,” including the infamous targeted advertising program Beacon that creeped everyone out and led to litigation and a settlement.

But Ullyot said that non-Internet companies are more likely to get in trouble with privacy these days. He spoke at length about the FTC case against Sears (yes, the company that sells you washing machines) for spying on customers' Internet surfing with a software download. Ullyot explained that although users agreed to the terms and conditions, the box where they could be read was only big enough for 10 lines and the clause about spying was somewhere around line 73.

At this point, James Basile, a fellow panelist and former colleague of Ullyot’s at Kirkland & Ellis, jumped in to say that although the Sears case was widely publicized, the FTC is actually quite active in cracking down on companies that are invading the privacy of web surfers. Comparing the FTC to Tony Soprano, who quietly comes around demanding payment, he said these enforcement efforts rarely reach the public.

— Zusha Elinson

Companies Seeing Lots Of Litigation On Horizon (But Not Necessarily Hiring)

Looks like companies in the U.S. and U.K. are expecting more litigation in the next year, but they don’t plan to deal with it by adding to their in-house counsel.

Fulbright & Jaworski just came out with its latest survey tracking litigation trends, and it says that more corporate lawyers than last year are expecting an increase in litigation in the next 12 months.

Details on that and other findings, after the jump ...

Apple's New GC Gets Stock Windfall (If He Can Survive Long Enough)

Steve Jobs doesn’t mind dishing out an enormous amount of stock for his new GCs — even though (or especially since?) no one ever sticks around Apple long enough to actually make it worth anything.

The short-tenured former IBM lawyer Don Rosenberg left about $30 million worth of unvested stock on the table when he left Apple (ignore the boot-print on the back of his Brionis) to become Qualcomm’s GC. Dan Cooperman appeared to miss out on $18 million when he “retired” earlier this month after just two years on the job. Goodness, working with Steve Jobs must just be a bowlful of fun times.

(Apple did have one longlasting GC: Nancy Heinen. She stayed on the job for nearly a decade before getting caught up with that pesky little stock options backdating scandal. And man, did her options vest.)

So it is with mixed emotions that Legal Pad reports that Apple gave its new GC Bruce Sewell 100,000 shares of Apple stock last week. The good news: it’s worth about $18.4 million at the $184-a-share price that Apple stock was trading at last Monday when the grant was made. The bad news: it vests over the next four years. We wish you luck, Mr. Sewell.

— Zusha Elinson

Bruce Sewell's New Valley Job Revealed: GC At Apple

OK, now it makes sense why Bruce Sewell stepped down as Intel GC yesterday: He’s taking over the top legal spot at Apple from Dan Cooperman, who’s retiring at 58, according to the company.

It seems like only yesterday Cooperman waltzed into Apple as part of the great GC switcheroo of November 2007. If you’ll recall, Apple brought in former IBM lawyer Don Rosenberg in 2006 to clean up Apple’s white plastic surface after it was tarnished by the stock option backdating scandal. But that didn’t go so well and Rosenberg was out the door on his way to Qualcomm after 10 months on the job.

When Steve Jobs hired Cooperman, everyone thought he’d found his man. Coop was a Valley veteran who knew how to handle big personalities: He had been GC of Oracle for years, where he tended to the rather outsized personality of CEO Larry Ellison. But less than two years later, Cooperman is retiring? Just a quarter of the 133,000 shares of Apple stock Cooperman got when he started have vested, meaning he’s left more than $17 million worth of stock on the table at the current price of Apple shares. (That assumes Apple hasn’t accelerated the vesting of his stock options).

We’ll have the complete story on CalLaw.com later on.

—  Zusha Elinson

Quick-Shrinkin' Yahoo Legal Dept. Gets a New IP Litigator

Someone is actually joining Yahoo’s legal department, which has suffered a few losses lately.

Pillsbury partner Kevin Kramer has been hired to be the head of IP litigation. He takes the place of Lisa McFall, who left earlier this summer.

Kramer is coming to Sunnyvale from Washington, D.C., where he had worked for Pillsbury since 2001 as an IP litigator. Before that he worked in the U.S. Patent and Trademark Office.

“Kevin is a seasoned litigator who brings a significant level of IP litigation experience to our team,” said Jeanine Hayes, who’s the head of IP at Yahoo.

The former head of IP, Joseph Siino, left late last year to start his own consulting shop, followed by McFall. Last week, we wrote about how head of global patents Duane Valz was leaving Yahoo to plant the flag for a New York law firm in the Bay Area.

Yahoo has had two recent successes in the IP arena. The Internet company got a patent lawsuit by PartsRiver dismissed two weeks ago that it had successfully transferred from the plaintiff-friendly Eastern District of Texas. It also won a copyright case against music companies suing it over its Internet radio service. But there was also that $6.6 million jury trial loss in Texas in to patent troll Acacia in another patent case.

— Zusha Elinson

Welcoming Lockstep's Demise

A quick followup on Orrick’s news yesterday that it’s dumping lockstep. We reached out to Susan Hackett at the Association of Corporate Counsel to see what she had to say about it.

The ACC launched an initiative last year called the Value Challenge, an effort to get law firms to … um ... they don’t put it this way, but it’s basically to get law firms to stop overcharging for stuff they could do more cheaply.

Corporate counsel like seeing the moves Orrick is making because it’s pretty much how they’ve been doing things for a long time.

“We are really supportive of firms that are considering performance-based comp throughout their ranks,” Hackett wrote in an e-mail.

“It would allow much greater freedom for associates and partners who would like to be judged on their contributions (and paid accordingly), rather than being told they can’t be valuable unless they generate a big stack of hours. Most clients I know who are watching these issues really laud firms who make this move — it is consistent with the corporate model that they also employ in their workplaces and which encourages evaluation, productivity, profitability, and efficiency, all based on performance and not on hours logged.”

(Note to associates: None of this means you’ll actually work fewer hours, of course.)

— Amanda Royal
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Yahoo Legal: The Shakeups Just Keep a-Shakin' ...

UPDATE:  Joe Siino emails us to say that Lisa McFall -- the head of IP litigation who's leaving Yahoo for Siino's IP consulting outfit -- didn't "take the McFall" for Yahoo's recent patent trial loss as we had wondered below. "Lisa gave notice to Yahoo! that she was leaving well in advance of the trial you referenced, and stuck around at the request of the company," Siino writes in an email.

Here’s your update the latest shake-ups in Yahoo legal: the click-fraud czar and the head of IP litigation are out.

Reggie Davis — a longtime Yahoo lawyer who was the target of a discrimination complaint  — has left to become general counsel at Zynga, a social video-game company that makes the popular “mafia wars” game. Davis was associate general counsel before moving out of legal to become the company’s “click-fraud czar” following complaints made against him by former Yahoo lawyer named Eulonda Skyles, who alleged that she was mommy-tracked and discriminated against for being black.

Also leaving Yahoo legal is Lisa McFall, the head of IP litigation. According to sources, she’ll be joining her former boss Joe Siino — who left his post as Yahoo’s head of IP last fall — at his new IP consulting company, called Ovidian. Siino has since been replaced by Jeanine Hayes. Legal Pad admittedly has no insight into the move, but just recently Yahoo decided to take its first patent case to trial in four years — and lost mightily. Could Lisa have taken the McFall? She didn’t call us back, Siino was busy traveling, and a Yahoo spokeswoman didn’t respond to an email.

— Zusha Elinson

MIPS Goes Through Another GC; Backdating Veteran Moves On

When Stu Nichols got a job at MIPS Technologies in 2007, it showed there was life after backdating. He’d been thrown under the bus at KLA-Tencor, like so many other general counsel during the backdating scandal, and became the first to get up dust himself off and get a new job.

But Nichols has now moved on from MIPS — a shrinking tech company in Mountain View dedicated mainly to licensing its IP. He left in April and was replaced by longtime MIPS in-house lawyer Gail Shulman Knittel.

“It was the right time to do it for the company,” Nichols said. “And I was able to make a transition that was fair economically for me.”

Not a great time to be looking for a job, but Nichols said he has "an opportunity" as a part-time GC at a software company.

MIPS spokeswoman Jen Bernier-Santarini said that Nichols left “to pursue other interests” adding that “Gail has deep background from both a legal perspective and a MIPS Technologies perspective.”

MIPS has now gone through two GCs since 2006. Kate Rundle came before Nichols. The new GC will no longer be reporting to MIPS CEO John Bourgoin as past GCs have. Instead Knittel will be reporting to Sandy Creighton — another former MIPS GC whose now an executive and head of HR.

— Zusha Elinson