In May 1996, Barak Bussel, vice president of Beverly-Hills based liquor exporter Saybrex International Inc. received a troubling phone message from his long-distance phone company AT & T.;
A customer-service representative of the telecom giant asked if Saybrex had received the phone bill she had just faxed.
The problem was that neither Bussel, nor anyone else in his office, had requested the bill, which included the confidential numbers of many of the company’s Asian clients.
More importantly, the bill in question never arrived.
According to a lawsuit filed against AT & T; by Saybrex in U.S. District Court last month, the numbers ended up in the hands of International Beverage Inc. of Burlingame, a direct competitor of Saybrex.
Saybrex is claiming that International Beverage used the numbers to solicit it customers, resulting in a loss of business totaling at least $3 million.
Saybrex, which deals in direct exports of liquor to specialty customers in Asia, is seeking $10 million in punitive damages, a yet undetermined amount of special damages based on the company’s loss of business and legal fees.
And in a move that could impact business nationwide, Saybrex also seeks a permanent court injunction requiring AT & T; to upgrade its security policies and the training of employees to ensure against the unauthorized disclosure of its customers’ phone bills.
“We want AT & T; to reform its practices so this kind of thing does not happen again,” said Bussel.
The case against AT & T; is another example of the mounting concern in corporate America about commercial espionage.
“This is a very typical example of why companies need to be more concerned about protecting trade secrets,” said Thomas Parker, chairman of Westlake Village -based security management firm Emerald Group. “Unfortunately, one of the real problems with doing business with E-mail and fax is that you really don’t know where the information is ending up.”
Parker didn’t think there was much more Saybrex could have done to protect its long distance bill.
“When another company acts as custodian of your records, there really is not much you can do to guarantee secrecy,” he said.
Earlier this year, GTE Corp., the state’s second-largest phone company, mistakenly printed tens of thousands of unlisted phone numbers and addresses in directories that are leased to telemarketers.
But while GTE admitted wrongdoing in that case and moved to minimize the error by reprinting the directories, Saybrex executives say AT & T; took months to release the telephone number to which the information had been faxed and never offered to help identify the owner of that number.
“We feel insulted by the cavalier way that we were treated,” said Bussel. “They disregarded our complaints because we were a small business. It indicates that other small businesses in Southern California should be worried.”
AT & T; spokeswoman Nilda Weglarz said company officials could not comment on the lawsuit. But in court papers, AT & T; acknowledged that the numbers were released.
Even so, AT & T; filed a motion to dismiss the case, saying that the records were released by “mistake,” and that it is only liable for damages under FCC rules if the plaintiff can prove that “willful misconduct” was involved.
Saybrex’s Bussel said that in the months following the faxing, International Beverage began calling up his customers across Asia. Smelling corporate espionage, Saybrex hired a private investigator to snoop out just who had received the phone numbers.
According to court documents filed by Saybrex, the investigator discovered that the list was faxed to Denver-based Touch Tone Information Inc., which specialized in securing confidential phone bills for a fee. Touch Tone officials could not be reached for comment.
In the same court documents, Saybrex claims that International Beverage hired Touch Tone to get the numbers.
Executives at International Beverage deny seeking and receiving the Saybrex phone numbers. They point out that a related Saybrex lawsuit against International Beverage was settled out of court earlier this year under undisclosed terms.
However, Saybrex did succeed in getting a state court injunction against International Beverage baring that firm from “obtaining, using or maintaining” any Saybrex business records or documents, or soliciting any business using those documents.
AT & T; said an earlier attempt by Saybrex to get a state court injunction requiring the telecom company to improve security failed because the plaintiff could not prove that AT & T; was continuing to release confidential documents.
As a result, AT & T; says that part of the federal case duplicates the state case and thus should be denied.
While Saybrex continues to use AT & T; for its voice telephone services, the company says it now uses MCI when sending faxes