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Nooks & Crannies · Revisionist History

• 0:15
  Speaker 1: Pushkin hold.
• 0:20
  Speaker 2: Let's take a little bite here. One morning not long ago,
• 0:26
  Speaker 2: my colleague bend ADF. Haffrey and I huddled in a
• 0:28
  Speaker 2: small back room at Pushkin Industries to solve a mystery.
• 0:33
  Speaker 1: It like hits the back of your palette. There's like
• 0:35
  Speaker 1: aunt funk to it, you know what I mean.
• 0:38
  Speaker 2: Through the glass wall of the room, we could see
• 0:40
  Speaker 2: our fellow Pushkin nights working on various prosaic podcasts and
• 0:44
  Speaker 2: audiobooks while we alone wrestled with an eternal question involving
• 0:51
  Speaker 2: toasted bread. Just from a sensory perspective, there's a lot
• 0:56
  Speaker 2: of crunch letten. Also, not forget its size. Yes, because
• 1:01
  Speaker 2: it's palm, it's palmable. Breakfast is the meal you make
• 1:05
  Speaker 2: when you're barely conscious, So the breakfast table is a
• 1:08
  Speaker 2: super bowl for food companies. Lunch is eating out, Dinner,
• 1:12
  Speaker 2: if you're lucky, is prepared from scratch. But think about breakfast.
• 1:16
  Speaker 2: All the day lies before you and you are in
• 1:19
  Speaker 2: need of sustenance. You want something wholesome but crucially easy.
• 1:24
  Speaker 2: A little ready made breakfast foods become lifelong habits. Brands
• 1:29
  Speaker 2: fight tooth and nail for a prime spot at that table.
• 1:32
  Speaker 2: Many have fought valiantly. Cherios, lucky charms, pop tarts, rice crispies.
• 1:38
  Speaker 2: But there's only one breakfast item legendary enough that when
• 1:43
  Speaker 2: I take a bite, suddenly I remember my childhood. Also,
• 1:47
  Speaker 2: how my father felt about cutting the cross off bread.
• 1:52
  Speaker 2: He I think he viewed that as a kind of
• 1:54
  Speaker 2: a sign of as it a kind of an a feat move,
• 1:58
  Speaker 2: a side of moral weakness, moral instead of a lack
• 2:03
  Speaker 2: of real kind of fiber when it came to eating
• 2:05
  Speaker 2: your food. Or Ben takes a bite and suddenly he's
• 2:08
  Speaker 2: off for the million time about proost.
• 2:11
  Speaker 1: It does have that kind of like Pristian association thing,
• 2:14
  Speaker 1: Like it tastes like this, I remember this taste. Yes,
• 2:18
  Speaker 1: when I have this like it does take me back,
• 2:21
  Speaker 1: like I am seeing my family's kitchen where we would
• 2:25
  Speaker 1: eat breakfast, and like the big spread.
• 2:28
  Speaker 2: Our breakfast mystery comes in packages of six, but they
• 2:32
  Speaker 2: cannot be eaten right out of the box. Each item
• 2:35
  Speaker 2: inside must be split in two, then toasted, then buttered
• 2:39
  Speaker 2: for the magic to work. And oh, the magic works.
• 2:43
  Speaker 2: I'm talking, of course, about Thomas's English muffins, the most
• 2:48
  Speaker 2: iconic breakfast bread of all time.
• 2:54
  Speaker 1: And for that reason it is nearly a half a
• 2:57
  Speaker 1: billion dollars a year in sales product. It is the
• 3:01
  Speaker 1: cinequonn of bread products, baked goods. Yeah, the champ undisputed.
• 3:08
  Speaker 2: What sets that thomas Is English muffin apart from all
• 3:10
  Speaker 2: the others. It says right there on the package Knooks
• 3:15
  Speaker 2: and Cranny's. The recipe for Thomas's English muffin has been
• 3:20
  Speaker 2: one of the most closely held trade secrets there is,
• 3:23
  Speaker 2: until allegedly one baking executive tried to make off with
• 3:28
  Speaker 2: the family jewels. I'm Malcolm Gladwell. You're listening to Revisionist History,
• 3:35
  Speaker 2: my show about things overlooked and misunderstood. Today on the show,
• 3:39
  Speaker 2: Ben and Alf Haffrey peers into the nooks and crannies
• 3:42
  Speaker 2: of one of the greatest legal cases you've never heard of.
• 3:46
  Speaker 2: It's a big story, this muffin case. Today you're getting
• 3:50
  Speaker 2: part one.
• 3:55
  Speaker 1: Here's Ben. I once hired a lawyer who dreams about
• 3:58
  Speaker 1: suing people. He told me this on a call once.
• 4:01
  Speaker 1: I asked for proof, and he showed me a video
• 4:04
  Speaker 1: of himself asleep, very clearly muttering I'll sue you, and
• 4:08
  Speaker 1: something to the effect of you're going to jail. There
• 4:10
  Speaker 1: were some swears in there too. My first thought was
• 4:14
  Speaker 1: this man is the best lawyer I'll ever have. Second thought,
• 4:17
  Speaker 1: I better pay him quickly. We were going over an
• 4:20
  Speaker 1: employment contract. We got to the part about intellectual property,
• 4:24
  Speaker 1: and I thought the degree to which an employer could
• 4:26
  Speaker 1: punish you if you ever divulged one of their trade
• 4:28
  Speaker 1: secrets seemed a little crazy, to which my lawyer replied, well,
• 4:33
  Speaker 1: it's took some crannies. And even recognizing I was paying
• 4:36
  Speaker 1: by the second, I was like, what did you just say?
• 4:41
  Speaker 3: Why have so many of you switched from toast at
• 4:44
  Speaker 3: Thomas's English muffins? Definitely the cranny.
• 4:47
  Speaker 1: It was the nooks. The key to English muffins supremacy
• 4:51
  Speaker 1: comes down to the balance of nooks which catch and
• 4:54
  Speaker 1: pool the melted butter and the thin, crisp walls of
• 4:57
  Speaker 1: the crannies. But somehow nooks and crannies are now lawyer
• 5:01
  Speaker 1: shorthand for trade secret.
• 5:04
  Speaker 3: Why Thomas's the nooks and Cranny's muffin making breakfast better?
• 5:09
  Speaker 1: For over one hundred years. In eighteen seventy four, a
• 5:15
  Speaker 1: baker named Samuel bath Thomas left England for the United States.
• 5:19
  Speaker 1: Little's known about his life before he lands in New York,
• 5:22
  Speaker 1: but he arrived with the recipe in his pocket for
• 5:25
  Speaker 1: what typically would be called Welsh muffins or crumpets. He
• 5:29
  Speaker 1: cooked them on a griddle so they'd be crisp on
• 5:31
  Speaker 1: the outside and dowe yet pockmarked in the inside in
• 5:35
  Speaker 1: a way few other breads were Thomas's. Nooks and Crannies
• 5:39
  Speaker 1: took New York by storm, demands skyrocketed. He opened another bakery,
• 5:44
  Speaker 1: then it became a corporation. Eventually the words Nooks and
• 5:48
  Speaker 1: Crannies became a registered trademark of Thomas's English muffins. You
• 5:53
  Speaker 1: will note, if you look at the bakery shelves at
• 5:55
  Speaker 1: your local grocery store, that other English muffin brands live
• 5:58
  Speaker 1: in fear of this fact. Dave's Killer Bread boasts of
• 6:02
  Speaker 1: butter catching flavor craters, Trader Joe's has pockets and crevices.
• 6:07
  Speaker 1: Bays has raised the white flag and left the field
• 6:10
  Speaker 1: entirely with a claim about packaging now resealable, because all
• 6:15
  Speaker 1: of them know better than to cross the entity that
• 6:18
  Speaker 1: now owns Thomas's group. O Bimbo, did you know that
• 6:24
  Speaker 1: your bread is owned by Mexico.
• 6:26
  Speaker 4: CNBC's Michelle Ruzcoberra caught up with the nation's largest bakery,
• 6:29
  Speaker 4: GROUPO Bimbo.
• 6:31
  Speaker 1: GROUPO Bimbo International Baking.
• 6:33
  Speaker 5: Conglomerate Entemens owned by a Mexican bread company, Sarah Lee
• 6:39
  Speaker 5: bought by a Mexican bread company. Group of Bimbo is
• 6:41
  Speaker 5: just the biggest baker in the United States.
• 6:42
  Speaker 2: It is the biggest baker in the entire world.
• 6:46
  Speaker 1: Bimbo is everywhere. They've taken over half the bread brands
• 6:50
  Speaker 1: you've heard of in fifty percent of the rest. They've
• 6:52
  Speaker 1: swept through the US, acquiring one bakery after another.
• 6:56
  Speaker 5: It's the first bakery with a big national footprint, and
• 6:59
  Speaker 5: they plan to be global.
• 7:01
  Speaker 1: No one stands in the way of GROUPO Bimbo. And
• 7:04
  Speaker 1: in two thousand and nine, at the height of their powers,
• 7:07
  Speaker 1: they acquired the holy Grail of baked goods, the Nooks
• 7:11
  Speaker 1: and Crannies.
• 7:12
  Speaker 5: Thomas's English Muffins, owned by a Mexican bread company.
• 7:16
  Speaker 1: The secret recipe for Nooks and Crannies brought in about
• 7:19
  Speaker 1: half a billion dollars in annual revenue to Group of Bimbo.
• 7:22
  Speaker 1: But then, according to Bimbo, someone tried to steal it.
• 7:29
  Speaker 1: Can you just tell me the the basic facts of
• 7:33
  Speaker 1: the case.
• 7:34
  Speaker 5: Well, in this case, I guess we can go through it.
• 7:37
  Speaker 1: I'm speaking with Louis del Judice, partner at the major
• 7:40
  Speaker 1: law firm Troutman Pepperlock, in a conference room high above Manhattan.
• 7:45
  Speaker 1: This is where my lawyer sent me when I asked
• 7:48
  Speaker 1: about cranny law. Louis is an expert in intellectual property.
• 7:52
  Speaker 1: He says a lot of people come to him to
• 7:54
  Speaker 1: determine if they have their own trade secrets, and he
• 7:57
  Speaker 1: tells them, sit down, my friends, and let me teach
• 8:00
  Speaker 1: you the lessons of the muffin.
• 8:03
  Speaker 5: Do you know with one of the best kept trade secrets?
• 8:05
  Speaker 5: And everybody thinks coke, And I'm like, well, Thomas is
• 8:08
  Speaker 5: English muffins, which we've all grown up on. There's only
• 8:10
  Speaker 5: ten people in the world that know how to make it.
• 8:12
  Speaker 5: Thomas's English muffin.
• 8:13
  Speaker 1: And people go, what, Actually it's fewer than ten. But
• 8:17
  Speaker 1: we'll get to that. Trade secrets are one of the
• 8:20
  Speaker 1: pillars of IP protection in the United States, along with patents, trademarks,
• 8:24
  Speaker 1: and copyright. But unlike the others, a trade secret never expires,
• 8:29
  Speaker 1: and the muffin case is one of the best examples
• 8:31
  Speaker 1: of a trade secret's power. And how to protect it.
• 8:35
  Speaker 1: Louis was not involved in the case directly, but he's
• 8:38
  Speaker 1: studied it at length. In any telling, he begins by
• 8:41
  Speaker 1: introducing the defendant, a former GROUPO Bambo employee named Chris Boticella.
• 8:47
  Speaker 5: Executive officer. He's in charge of the entire West Coast,
• 8:51
  Speaker 5: United States, and he's privy to all this information, all
• 8:54
  Speaker 5: the recipe books, and all of this other financial information
• 8:58
  Speaker 5: and efficiencies. He has to sign a non disclosure agreement,
• 9:02
  Speaker 5: but that non disclosure agreement's only well he's employed.
• 9:07
  Speaker 1: It's twenty ten, the year after Group of Bembo acquired Thomas's.
• 9:11
  Speaker 1: According to documents presented in court, the information required to
• 9:15
  Speaker 1: produce a Thomas's English muffin is known by only seven
• 9:18
  Speaker 1: people at the company. It's kept in secret codebooks that
• 9:22
  Speaker 1: only a few people have access to. Babachella, as a
• 9:25
  Speaker 1: senior executive, is one of those people. He oversees a
• 9:29
  Speaker 1: facility in Placentia, California, where the muffins are made. He's
• 9:33
  Speaker 1: been in the industry since he was sixteen and has
• 9:36
  Speaker 1: risen through the ranks through sheer skill till finally he's
• 9:39
  Speaker 1: reached the pinnacle. Bimbo bakery's executive of almost a decade,
• 9:45
  Speaker 1: but lately Chris has been unhappy.
• 9:50
  Speaker 5: He had said that they had done some cost cutting
• 9:52
  Speaker 5: and some head cutting, so that sort of left the
• 9:55
  Speaker 5: bad taste in his mouth. It sounded like, from the
• 9:58
  Speaker 5: one email that's attached to the complaint that maybe had
• 10:01
  Speaker 5: a little bit of a friction with his manager, you know,
• 10:04
  Speaker 5: the guy above him. He's just like, you know, there's
• 10:07
  Speaker 5: a line that literally says, you know, you and I
• 10:09
  Speaker 5: I may not have always nine to I, but we've
• 10:11
  Speaker 5: always known what was best for the company. So when
• 10:14
  Speaker 5: you read that, you know, that's a polite way of
• 10:16
  Speaker 5: saying you and I used to fight a lot.
• 10:19
  Speaker 1: Chris gets a job offer at Hostis, famed owner of Twinkies,
• 10:24
  Speaker 1: one of Bambo's only competitors, but just barely. Hostess had
• 10:28
  Speaker 1: just gone through bankruptcy. Hostess was a possible target for
• 10:31
  Speaker 1: Bambo acquisition, but then Bimbo would have owned almost every
• 10:35
  Speaker 1: bake good on the planet, and at that point, where's
• 10:37
  Speaker 1: the fun. Chris probably knew that group of Bimbo wasn't
• 10:40
  Speaker 1: going to be thrilled about the Hostess of it all,
• 10:43
  Speaker 1: But he wants to get his year end bonus so
• 10:45
  Speaker 1: he doesn't leave right away.
• 10:47
  Speaker 5: So now he's sitting all through Q four at his
• 10:51
  Speaker 5: role with Thomas's getting all the Q four information, all
• 10:54
  Speaker 5: the look foward information for the next year, all the financials,
• 10:57
  Speaker 5: on top of all the other knowledge he had.
• 11:01
  Speaker 1: Chris signs with Hostess in October. His start date is January.
• 11:05
  Speaker 1: The weeks stick by, Chris finally announces he's leaving Bimbo,
• 11:09
  Speaker 1: but he doesn't say he's going to a new job.
• 11:11
  Speaker 1: Given his long tenure, his colleagues probably assume he's retiring.
• 11:15
  Speaker 1: According to court documents, he asks about how to enroll
• 11:18
  Speaker 1: in health coverage.
• 11:19
  Speaker 5: Oh, I need cobra, meaning like that's code word for
• 11:22
  Speaker 5: like I'm going to retire. Almost right, but.
• 11:24
  Speaker 1: Then Hostess puts out a press release.
• 11:28
  Speaker 5: They helped find out about Host's press release that he's
• 11:30
  Speaker 5: going to work in the next two days.
• 11:32
  Speaker 1: For Hostess, and Bembo's like, oh shit.
• 11:36
  Speaker 5: We've got this seventy five year old plus secret of
• 11:39
  Speaker 5: how to bake Thomas's English muffins. It's a half a
• 11:41
  Speaker 5: billion dollar product and he knows it.
• 11:44
  Speaker 1: Does Hostess have an English muffin? Not yet? Fuck HR calls.
• 11:48
  Speaker 5: Chris, no, no, you weren't retiring. You were going to
• 11:50
  Speaker 5: the hated competitor.
• 11:52
  Speaker 1: This is bad, Hr says, get out.
• 11:54
  Speaker 5: Now, he got to a certain point where he knew
• 11:57
  Speaker 5: too much and now he's iced out.
• 12:00
  Speaker 1: Chris is walked out of the building. He has no
• 12:03
  Speaker 1: idea what's coming for him, least of all that he's
• 12:06
  Speaker 1: about to be swallowed up by the k Nooks and grannies.
• 12:12
  Speaker 1: We'll be right back. We're going to return to the
• 12:18
  Speaker 1: Knoks and grannies, I promise. But first we have to
• 12:22
  Speaker 1: talk about Willy Wonka.
• 12:24
  Speaker 4: So I'll start by saying that one of my favorite
• 12:28
  Speaker 4: books as a kid was Roald Dahl's Charlie and the
• 12:31
  Speaker 4: Chocolate Factory.
• 12:32
  Speaker 1: Genie C. Fromer is a Weis dean at the New
• 12:35
  Speaker 1: York University Law School. She's also the Walter J. Derenberg
• 12:38
  Speaker 1: Professor of Intellectual Property Law and the scholar of Charlie
• 12:42
  Speaker 1: and the Chocolate Factory.
• 12:44
  Speaker 4: When my kids were younger, I was rereading the book
• 12:47
  Speaker 4: to them, and I was struck, now that I was
• 12:51
  Speaker 4: working in intellectual property, by how much of the story
• 12:55
  Speaker 4: was actually driven by trade secrets, in that Willy Wonka
• 13:01
  Speaker 4: had had to shut down his factory because all of
• 13:03
  Speaker 4: his competitors were sneaking in spies to work there so
• 13:07
  Speaker 4: they could steal his us and candy innovations, and he
• 13:11
  Speaker 4: couldn't tolerate it as a business matter anymore, so he
• 13:14
  Speaker 4: shut down.
• 13:17
  Speaker 1: For those in need of a refresher. In the book,
• 13:19
  Speaker 1: Wonka's Factory has started back up, but nobody understands how.
• 13:24
  Speaker 1: Nobody ever goes in, nobody ever comes out. This is
• 13:27
  Speaker 1: why it's so exciting when Charlie gets the golden ticket
• 13:29
  Speaker 1: to go see the inside of the factory. Nobody sees
• 13:32
  Speaker 1: the inside of the factory.
• 13:34
  Speaker 4: And so what we learn is that Willy Wonka has
• 13:37
  Speaker 4: found the magical solution to trade secret theft by having
• 13:42
  Speaker 4: umpa lumpas work in the factory. Why are they the
• 13:45
  Speaker 4: magical solution because they don't leave. They live there, so
• 13:50
  Speaker 4: they're not going to be sneaking out any trade secrets.
• 13:53
  Speaker 4: They're paid in chocolate. They're happy. Let's not talk about
• 13:57
  Speaker 4: the some of the racists and other aspects.
• 14:00
  Speaker 1: Maybe in a viohilation of some employment law, but it's totally.
• 14:10
  Speaker 1: Genie's insight about the umpa lumpas became the seed of
• 14:14
  Speaker 1: not one, but two brilliant articles. She wrote, using Willy
• 14:17
  Speaker 1: Wonka as the skeleton key for understanding trade secrecy. Her
• 14:21
  Speaker 1: major revelation, Willi Wanka's paranoia, the spying and extreme secrecy
• 14:26
  Speaker 1: was totally justified. It was essentially based on a true story.
• 14:31
  Speaker 1: This is just part of being in the candy industry.
• 14:33
  Speaker 4: Everything from reading about the Mars company blindfolding any repair
• 14:39
  Speaker 4: people that would come into fixed machines so they wouldn't
• 14:41
  Speaker 4: see anything else, to spies being put into factories and
• 14:46
  Speaker 4: guarding against that. So it felt actually very true to life,
• 14:49
  Speaker 4: and that was a little bit shocking to me.
• 14:52
  Speaker 1: Trade secrecy is the part of the law where life
• 14:55
  Speaker 1: begins to resemble Willy Wonka.
• 14:58
  Speaker 3: This is the most secret machine in my entire factory.
• 15:03
  Speaker 1: What's it do?
• 15:04
  Speaker 5: Cat you see?
• 15:04
  Speaker 3: It makes everlasting gobstoppers?
• 15:06
  Speaker 1: Did you see? People love secrets from a very early age.
• 15:10
  Speaker 1: It's why Charlie in the Chocolate Factory is a classic
• 15:13
  Speaker 1: children's story. It's not just the candy, it's the secrets.
• 15:17
  Speaker 1: The world is already full of things you can't understand
• 15:20
  Speaker 1: when you're little, and now someone's going to share the
• 15:22
  Speaker 1: most special, true knowledge behind it all. But secrets are
• 15:29
  Speaker 1: also dangerous. If I tell you a secret. It means
• 15:32
  Speaker 1: I trust you. It binds us together, but it also
• 15:35
  Speaker 1: alters the balance of power between us. You know something
• 15:38
  Speaker 1: I don't want other people to know. That puts me
• 15:41
  Speaker 1: at risk. So I need you to know it's a secret.
• 15:44
  Speaker 1: I tell you, don't tell anyone before I whisper in
• 15:48
  Speaker 1: your ear. I put up a sign on my bedroom
• 15:50
  Speaker 1: door saying top secret, keep out. Trade secrecy works on
• 15:55
  Speaker 1: playground rules.
• 15:57
  Speaker 3: I can only give them to you if you solemnly
• 15:59
  Speaker 3: swear to keep them for yourselves and never show them
• 16:02
  Speaker 3: to another living soul as long as you all shall live, agreed, aguly.
• 16:10
  Speaker 1: Now imagine I'm a major corporation in the real world.
• 16:13
  Speaker 1: I'm infinitely more powerful than you. I'm Willie Wonka and
• 16:17
  Speaker 1: you are an oo ballompa. I tell you a secret,
• 16:20
  Speaker 1: maybe one you don't even want to know. And then
• 16:22
  Speaker 1: I say, by the way, I have eyes everywhere, and
• 16:25
  Speaker 1: if you breathe a word of this secret to anyone,
• 16:27
  Speaker 1: or even look as if you might breathe a word,
• 16:30
  Speaker 1: I will destroy you. This is the crux of it.
• 16:34
  Speaker 1: At their best, trade secrets protect valuable intellectual property from
• 16:38
  Speaker 1: being stolen. But at their worst, they're a powerful tool
• 16:42
  Speaker 1: for a company that wants to turn an employee into
• 16:46
  Speaker 1: an oo ballompa. It used to be the easiest way
• 16:50
  Speaker 1: to turn a human being into an oop ballompa was
• 16:52
  Speaker 1: a non compete clause. But Janie says that's going away.
• 16:57
  Speaker 4: We've been living in a world where fast food workers
• 17:01
  Speaker 4: have been asked to sign non compete agreements, and you know,
• 17:05
  Speaker 4: historically people understood non compete as being for the a
• 17:09
  Speaker 4: small number of employees, the highest level employees, the ones
• 17:12
  Speaker 4: with the access to the most sensitive information, And they're
• 17:16
  Speaker 4: just being deployed as form contracts for so many workers
• 17:21
  Speaker 4: and workers with lower incomes in ways that are keeping
• 17:26
  Speaker 4: them in jobs that they might want to leave and
• 17:29
  Speaker 4: go somewhere else.
• 17:31
  Speaker 1: A lot of states are banning non competes now, which
• 17:33
  Speaker 1: is one of the reasons a company might come to
• 17:35
  Speaker 1: Louis del Judy's IP expert to help identify and protect
• 17:39
  Speaker 1: their secrets. Could you make that bit in a secret room?
• 17:42
  Speaker 1: Can you have a black vault in the office. Could
• 17:45
  Speaker 1: there be a secret codebook?
• 17:46
  Speaker 5: Because a trade secret will be the only way to
• 17:50
  Speaker 5: stop somebody if you really think they're taking something that's
• 17:53
  Speaker 5: proprietary to your company someplace else. Because a non compete
• 17:57
  Speaker 5: is not going to really be in play.
• 18:00
  Speaker 1: But trade secrets can have a dangerous power.
• 18:03
  Speaker 4: Sometimes people are just good at what they do, and
• 18:08
  Speaker 4: they have advantages to continue working in the same industry
• 18:11
  Speaker 4: because they know that industry and their business has over
• 18:16
  Speaker 4: claimed things of secrets, and that might prevent them from
• 18:21
  Speaker 4: taking another job.
• 18:23
  Speaker 1: Trade secrets are the only intellectual property protection that can
• 18:27
  Speaker 1: last forever, and because of that permanence and the way
• 18:30
  Speaker 1: we're geared to think about secrets already, they have a
• 18:33
  Speaker 1: kind of mystical aura in our secular, disenchanted world. They
• 18:38
  Speaker 1: are the closest thing we have to magic. The authentic
• 18:43
  Speaker 1: Coca Cola formula is written by the tiny grain of
• 18:46
  Speaker 1: rice kept in an old liking chest, or cursed on
• 18:50
  Speaker 1: anyone who opens it. The most famous ones are the recipes,
• 18:54
  Speaker 1: Coca Cola's secret formula, KFC's eleven spices, the exact way
• 18:59
  Speaker 1: to create Wrigley's gum. But actually a whole lot of
• 19:02
  Speaker 1: things can be trade secrets, software code, financial information. You
• 19:06
  Speaker 1: may know a trade secret and not even totally realize it,
• 19:10
  Speaker 1: but a good way to recognize one is the nooks
• 19:13
  Speaker 1: and crannies test. This feels like a good transition to
• 19:17
  Speaker 1: me to Bimbo Bakeries versus Banchella. Can you tell me
• 19:22
  Speaker 1: how you came across the case and how you teach it.
• 19:26
  Speaker 4: I know the case through working on trade, seper scholarship,
• 19:30
  Speaker 4: and teaching. It's a more recent classic.
• 19:33
  Speaker 1: I would say, Bimbo Bakeries versus Boutchella. It seemed like
• 19:40
  Speaker 1: every lawyer I talked to knew about the case. It
• 19:43
  Speaker 1: wasn't a precedent so much as a legend, a piece
• 19:46
  Speaker 1: of lore, a fairy tale warning about the Umpah Lumpa
• 19:49
  Speaker 1: who took the everlasting gobstopper out of Willy Wonka's factory
• 19:54
  Speaker 1: and tried to sell it to a competitor. Like any
• 19:57
  Speaker 1: good fairy tale, it's a good teaching tool because the
• 19:59
  Speaker 1: moral's clear, except and I realized the lessons of this
• 20:05
  Speaker 1: case aren't clear at all. If somehow you missed the
• 20:17
  Speaker 1: twenty seventeen edition of the Pennsylvania Super Lawyers magazine, I
• 20:21
  Speaker 1: would encourage you to look it up, specifically an article
• 20:24
  Speaker 1: titled I Can Do That about a Pennsylvania super lawyer
• 20:28
  Speaker 1: named Elizabeth Ainsley. Liz Ainsley is Fearless. She was head
• 20:33
  Speaker 1: of the Eastern District of Pennsylvania's fraud team, A super
• 20:36
  Speaker 1: lawyer's magazine puts it quote. Ainsley has represented whistleblowers in
• 20:40
  Speaker 1: several major cases, defended and prosecuted high profile RICO cases
• 20:44
  Speaker 1: against law firms and pharmaceutical companies, defended a major national
• 20:48
  Speaker 1: bank in a lender liability trial, and successfully defended The
• 20:51
  Speaker 1: New York Times in a federal defamation trial. End quote legend.
• 20:57
  Speaker 1: And yet in that whole article they don't mention a
• 21:00
  Speaker 1: call she got sometime in January twenty ten regarding a
• 21:03
  Speaker 1: secret recipe for English muffins.
• 21:05
  Speaker 6: It was a pretty small budget to begin with, and
• 21:09
  Speaker 6: I was at a big firm, so there was some
• 21:11
  Speaker 6: question about whether I could take it or not. But
• 21:14
  Speaker 6: they let me take it.
• 21:15
  Speaker 1: When you say let you take it, were you eager
• 21:18
  Speaker 1: to take it? Yeah?
• 21:20
  Speaker 6: It was an interesting case. It was kind of a
• 21:23
  Speaker 6: David and Goliath situation. I thought people ought to be
• 21:27
  Speaker 6: free to move from one employer to another, and Chris
• 21:33
  Speaker 6: seemed to be.
• 21:35
  Speaker 5: Out of his desk.
• 21:36
  Speaker 1: Wow.
• 21:37
  Speaker 6: So well, he was a single person and being sued
• 21:43
  Speaker 6: by a huge.
• 21:46
  Speaker 1: Corporation, global conglomerate.
• 21:48
  Speaker 6: As with the deepest of pockets.
• 21:53
  Speaker 1: Chris Boticella as I have mentioned, was in trouble. Bimbo
• 21:56
  Speaker 1: Bakeries has just found out that one of seven employees
• 21:59
  Speaker 1: who knew the secret recipe for their newly acquired and
• 22:02
  Speaker 1: extremely valuable Thomas's English Muffins was going to work for
• 22:06
  Speaker 1: a competitor. Group of Bimbo is one of the large
• 22:09
  Speaker 1: bakeries in the world. Group of Bimbo bows to nobody.
• 22:12
  Speaker 1: So within days of Chris's termination, before he starts his
• 22:16
  Speaker 1: new job at Hostess, attorneys for Bimbo file an injunction
• 22:20
  Speaker 1: in a Pennsylvania court, which is technically where Thomas's is based,
• 22:24
  Speaker 1: but mainly it's a way better place for them to
• 22:26
  Speaker 1: argue the case than California. I would like to read
• 22:29
  Speaker 1: to you from the factual allegation section of what they filed.
• 22:33
  Speaker 1: Items one through ten cover the basics of the case,
• 22:36
  Speaker 1: and then they get to the secret. BBU and its
• 22:40
  Speaker 1: predecessors have gone to great lengths to keep secret the
• 22:43
  Speaker 1: recipe and process for making Thomas's English Muffins for over
• 22:47
  Speaker 1: seventy five years. Thomas's English Muffins are a unique product,
• 22:52
  Speaker 1: famous for their distinctive nooks and cranny's characteristics. As a
• 22:56
  Speaker 1: result of his employment Bodicella learned trade secrets relating to
• 22:59
  Speaker 1: the production of the Thomas's English muffins, including not only
• 23:03
  Speaker 1: its recipe, but also the equipment necessary for production, necessary
• 23:07
  Speaker 1: moisture level, and the way the product is baked, which
• 23:10
  Speaker 1: all contribute to its distinctive characteristics. With the knowledge described
• 23:15
  Speaker 1: in paragraph thirteen, Vodicella could produce an English muffin that
• 23:19
  Speaker 1: might look a bit different, but that would nevertheless possess
• 23:22
  Speaker 1: the distinctive taste, texture, and flavor character that distinguished the
• 23:26
  Speaker 1: Thomas's English muffins and that have been the foundation of
• 23:30
  Speaker 1: the product's success. End quote. If you're Chris, this.
• 23:37
  Speaker 7: Is bad.
• 23:40
  Speaker 5: Because you have to The judge is coming to this.
• 23:42
  Speaker 1: Cold Louis del Judice partner Troupman Pepper Locke muffin trade
• 23:47
  Speaker 1: secret enthusiast.
• 23:48
  Speaker 5: He knows nothing about what's going on. He gets a
• 23:50
  Speaker 5: slice of paper that's, you know, this emergency order on
• 23:53
  Speaker 5: top of his desk that says, we need you to
• 23:55
  Speaker 5: act now, and we need you to stop somebody from
• 23:58
  Speaker 5: getting a job. Right. That's a pretty tall order to
• 24:00
  Speaker 5: ask a judge to do. And the judge looks at
• 24:03
  Speaker 5: it and says, Thomas's English muffins, Oh, the nooks and Crandies.
• 24:07
  Speaker 1: An immediately recognizable dre secret. Absolutely, you can't let someone
• 24:11
  Speaker 1: take the secret behind the greatest breakfast product of all time.
• 24:15
  Speaker 1: The judge grants Biembo's wish. Chris can't join Hostess till
• 24:19
  Speaker 1: the case is heard. Meanwhile, Grupo Bimbo has hired a
• 24:22
  Speaker 1: computer forensics expert who starts looking through Chris's laptop right after.
• 24:27
  Speaker 5: He got off the phone with HR when they said, hey,
• 24:29
  Speaker 5: we heard the announcement from Hostess. All sudden, three flash
• 24:32
  Speaker 5: drives ends up getting plugged into the laptop.
• 24:34
  Speaker 1: When confronted with this information, Chris told the court he
• 24:37
  Speaker 1: was practicing for his new job. The court is like,
• 24:41
  Speaker 1: are you serious, I.
• 24:42
  Speaker 5: Was practicing for my new job. Out of copy, step
• 24:44
  Speaker 5: on to a flash drive and take it off the
• 24:46
  Speaker 5: flat drive and put it back on the flash He's got,
• 24:48
  Speaker 5: you know, your figure. He's in his late fifties, he's
• 24:51
  Speaker 5: not good with technology. But yeah, So the court found
• 24:54
  Speaker 5: that a little bit unbelievable that he was practicing.
• 24:59
  Speaker 1: Chris conceded that it was complicated, but there are mitigating
• 25:03
  Speaker 1: factors here. First, the rush of it all and the
• 25:06
  Speaker 1: fact that he just met Liz, his lawyer. Then two
• 25:09
  Speaker 1: he'd signed a document with Hosts saying that he wouldn't
• 25:11
  Speaker 1: share any confidential Bimbo information. He said he'd stuck around
• 25:16
  Speaker 1: because he wanted to get his ear end bonus and
• 25:18
  Speaker 1: finished two projects he was working on. But the court
• 25:21
  Speaker 1: was not convinced. There's not a.
• 25:23
  Speaker 5: Lot of confusion or new law that was made. It's
• 25:28
  Speaker 5: just everything's really black and white.
• 25:32
  Speaker 1: This is the classic version of the case black and white.
• 25:35
  Speaker 1: Bimbo catches muffin thief, accuses executive of stealing all sorts
• 25:39
  Speaker 1: of trade secrets, except his lawyer. Liz says, if you
• 25:42
  Speaker 1: look at those documents, there's no evidence of that.
• 25:46
  Speaker 6: I saw all of that stuff, and none of it
• 25:48
  Speaker 6: had anything to do with the products that Bimbo produced.
• 25:53
  Speaker 6: It had nothing to do with not only English muffins,
• 25:56
  Speaker 6: but also you know where cupcakes or.
• 26:01
  Speaker 1: Anything else sandwich thins. Yeah, exactly, Liz says. Sure, in
• 26:06
  Speaker 1: those documents there's financial information, costs, save strategies, et cetera.
• 26:10
  Speaker 1: Confidential stuff, but that's in a different category than the
• 26:14
  Speaker 1: ancient muffin trade secret. I can actually read it to
• 26:18
  Speaker 1: you this section.
• 26:19
  Speaker 7: Okay, So documents and Exhibits nine through twenty five include
• 26:22
  Speaker 7: Bimbo's cost reduction strategies, product launch dates, anticipated plant and
• 26:26
  Speaker 7: line closures, labor contract information, production strength and weaknesses of
• 26:31
  Speaker 7: many Bimbo bakeries, and the cross structures for individual products
• 26:35
  Speaker 7: by brand. All this documentation is highly confidential, even within Bimbo,
• 26:40
  Speaker 7: and would be extremely harmful to Bimbo in the hands
• 26:42
  Speaker 7: of the competitor.
• 26:43
  Speaker 1: You don't think that's sufficient.
• 26:45
  Speaker 6: I agree that it was confidential. It's confidential, but it's
• 26:48
  Speaker 6: not a trade secret.
• 26:50
  Speaker 1: Bimbo leads with the nooks and crannies and the muffins,
• 26:54
  Speaker 1: but in all the fine print of their complaint Narian Nook,
• 26:57
  Speaker 1: Nora Cranny, And yet Liz thinks that's really what this
• 27:01
  Speaker 1: was all about.
• 27:03
  Speaker 6: Anytime any executive leaves a big company and goes to
• 27:07
  Speaker 6: another company, he'll be taking with him the knowledge that
• 27:10
  Speaker 6: he's acquired of how to be a chief executive or
• 27:13
  Speaker 6: a senior executive. You can't say that that's a secret
• 27:17
  Speaker 6: just because he's learned it at one company. I did
• 27:21
  Speaker 6: think that they wanted to maybe make a statement to
• 27:27
  Speaker 6: people at Bimbo who might be thinking of stealing the
• 27:30
  Speaker 6: or peddling the English muffin secret. You know that they
• 27:34
  Speaker 6: were going to pursue them.
• 27:36
  Speaker 1: What anyone on the outside of the case knows is
• 27:38
  Speaker 1: the result. Chris got crushed. If you search this case online,
• 27:43
  Speaker 1: you'll see an example made of it on all sorts
• 27:45
  Speaker 1: of law firm websites. You'll find it in an introductory
• 27:48
  Speaker 1: textbook for intellectual property law. But in none of those
• 27:52
  Speaker 1: will you hear whether Bimbo Bakeries was truly able to
• 27:55
  Speaker 1: hold its most legendary secret up under scrutiny because the
• 28:00
  Speaker 1: case never went to trial. It was meant to go
• 28:03
  Speaker 1: to trial, but Liz told me there wasn't money for
• 28:07
  Speaker 1: a trial. The judge ruled in favor of Bimbo. Hostess
• 28:12
  Speaker 1: told The New York Times, we have a business to run.
• 28:16
  Speaker 1: We have to move on. Liz appealed the case and lost.
• 28:20
  Speaker 1: The ruling stood. Now, I'll grant you that Chris was
• 28:24
  Speaker 1: not an ideal defendant, but this case had real consequences
• 28:27
  Speaker 1: for his life.
• 28:29
  Speaker 5: After the fact that said, you go anywhere near the
• 28:31
  Speaker 5: baking industry, you have to tell Thomas's that you're going
• 28:35
  Speaker 5: to be employed there, and which means thomas'es now would
• 28:38
  Speaker 5: have the right to go to court and get some
• 28:40
  Speaker 5: subpoenas and ask questions of the new employer and what
• 28:42
  Speaker 5: is he going to do? Like, what is this poor guy,
• 28:45
  Speaker 5: if you want to take his side of the story,
• 28:47
  Speaker 5: what is this poor guy supposed to do? Because now
• 28:50
  Speaker 5: he have a set of handcuffs on, he has to
• 28:52
  Speaker 5: continue to work and can't go anywhere else, which is
• 28:55
  Speaker 5: essentially what happened to him. No one's going to touch
• 28:57
  Speaker 5: that guy now with a ten foot pole.
• 29:00
  Speaker 1: Bimbo didn't respond to a request for comment by the
• 29:03
  Speaker 1: time we recorded this episode. I tried for months to
• 29:06
  Speaker 1: reach Chris s Poticella. Finally I found an address and
• 29:10
  Speaker 1: I wrote him a letter. He wrote me an email
• 29:14
  Speaker 1: in which he described traveling to the hearing across the
• 29:16
  Speaker 1: country even though he lived in California, scrambling to pay
• 29:19
  Speaker 1: for the appeal, and going bankrupt. He writes, quote, you
• 29:23
  Speaker 1: will never understand the impact that this had on my
• 29:26
  Speaker 1: personal and professional life. What first grabbed me about this
• 29:32
  Speaker 1: story was the idea that the nooks and crannies of A.
• 29:34
  Speaker 1: Thomas's English Muffin had some supercharged legal power. But by
• 29:39
  Speaker 1: this point, after reporting the story, I realized what this
• 29:42
  Speaker 1: had meant at least to Chris, and when I talked
• 29:45
  Speaker 1: to Louis and Jeanie about the future of trade secrecy,
• 29:48
  Speaker 1: I saw a world of trade secrets opening up before me,
• 29:51
  Speaker 1: at once futuristic and medieval, where every company had mystical
• 29:56
  Speaker 1: codebooks full of secret recipes, a knook and cranny for
• 30:00
  Speaker 1: every employee. Nooks and Cranny's is a shorthand for trade secret,
• 30:09
  Speaker 1: but the actual trade secret of the nooks and crannies
• 30:13
  Speaker 1: never came before a jury. I had learned that this
• 30:15
  Speaker 1: controversy was, to my mind unresolved, so we at Revisionist
• 30:21
  Speaker 1: History decided to resolve it. We are trying to free
• 30:28
  Speaker 1: the muffin, So we're we're reverse engineering the muffin recipe. WHOA,
• 30:33
  Speaker 1: I kind of love this, Okay, okay, don't tell people
• 30:35
  Speaker 1: that next week we attempt to crack the code of
• 30:40
  Speaker 1: the English muffin. My question for you is, is this
• 30:43
  Speaker 1: like you're trying to create their exact products?
• 30:48
  Speaker 5: Yeah?
• 30:48
  Speaker 1: Can we make this exact English muffin? Revision's History is
• 30:55
  Speaker 1: produced by Me then that of Haffrey, with Lucy Sullivan
• 30:59
  Speaker 1: and Nina Bird Lawrence. This episode was edited by Julia Barton.
• 31:03
  Speaker 1: Special thanks to Jake Flanagan, Jordan Mannequin, Greta Cone, and
• 31:07
  Speaker 1: Sarah Nix. Back checking on this episode by Kate Ferby,
• 31:12
  Speaker 1: Original scoring by Louis Scara, mixing and mastering by Ecco Mountain.
• 31:17
  Speaker 1: Our executive producer is Jacob Smith. I'm Ben matt A Faffrey.