Richard R. Pickard,” the Daily Journal, November 3, 2015
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“Richard R. Pickard,” The Daily Journal, November 3, 2015 SANTA CRUZ - From frustration to fruition encapsulates the journey Plantronics Inc.'s founders Courtney Graham and Keith Larkin took in the 1960s as they developed the world's lightest and most advanced communications headset. The two commercial airline pilots found the cumbersome state of aviation communication devices at the time abhorrent. The technology was so bulky and uncomfortable that some pilots returned to using handheld microphones. So in 1961, the two set themselves to changing the game in a Santa Cruz garage. Five years later, their headset breached the stratosphere - literally - when astronaut Wally Schirra employed it on the Project Mercury mission, the United States' first human spaceflight program. And in 1969, Neil Armstrong spoke his famous words through a Plantronics headset before leaping on to the moon. The headset even has a name, Snoopy, an homage to its large, black ear coverings. Plantronics has come a long way since its trip to the moon. In the decades following the Apollo 11 mission, the company penetrated the telephone and aviation sectors, eventually pushing into the consumer headset market - Bluetooth gadgets especially. Richard R. Pickard has led Plantronics' legal department for a large chapter of that stretch. He joined the company in 2001 after a 14-year tenure with semiconductor company Zilog Inc. as the economy was reeling from the collapse of the dot-com bubble. Today the company has more than 3,000 employees worldwide and revenue approaching $700 million. Along with engineering a lengthy portfolio of communications devices, Plantronics is also re-engineering the workplace, something in which Pickard takes pride. He said employee productivity is based on results, not presence, and that employees are allowed to work from home. When they work from a Plantronics campus, they can roam freely between multiple private office suites and conference rooms. No one has a dedicated cubicle. Pickard said this shift in workplace culture has improved employee satisfaction, retention and recruitment. Daily Journal staff writer Banks Albach recently sat down with Pickard at Plantronics' Santa Cruz headquarters to discuss the growth of the company and his legal docket. Here is an edited transcript. Daily Journal: Plantronics has a pretty storied history, but what's the primary focus of the company in 2015? Pickard: Unified communications is where we are today. People are getting rid of their desk phones and using their computer system and myriad devices they have. And it's not only voice communications, but rich communications with conference calling and presentations being shared around the world. The voice there is most [often] conveyed using a headset. So we've worked with the Microsofts, the Ciscos, and the Availos of the world to provide that voice element. One of things we're trying to do right now is something we call "taming the chaos." Everybody has multiple devices they're using - cell phones, tablets, laptops and desktops. One of our goals is to enable communication through the same Plantronics headset with all of those different devices DJ: How many GCs has Plantronics had? Pickard: I honestly don't know going back to the start of the company. But I've seen records of four that I'm aware of. I was recruited by the second of the four, a man by the name of John Knudsen. In between John and I, Kevin Goodwin was GC. They did a terrific job. DJ: Not many in-house attorneys have worked at the same company through two economic downturns. How did Plantronics handle the dot-com bust and the 2008 recession? Pickard: We don't overstaff during the good times and we don't have tremendous cutbacks during the down times. All companies will have layoffs, but ours were relatively modest in the grand scheme of things, both in the aftermath of the dot-com bust and in the 2007-2009 downturn. In the legal department we only had to lay off three people in the 2008 recession out of a staff of about 17. While I hated doing that, all of the people we have working here, the legal department included, are terrific. You do the best you can for those folks. Give them a reasonable package. You help them find new jobs. You give them terrific recommendations if they're good employees and you help them land on their feet. DJ: What's the full size of your legal department today and what matters do you keep in-house? Pickard: We're about 20, including paralegals. In-house we have some generalists who focus on litigation and litigation support. We don't actually litigate the cases, we hire outside for that. There's a tremendous amount of strategizing. Gathering documents, figuring out the best witnesses for the litigation. We've actually brought some of the patent prosecution work in-house. Over the 14 years I've been here, we've grown our patent portfolio from 11 utility patents to around 190. We also have roughly 400 or more design patents and we do almost all of that work in-house. We are rarely on the defensive for design patents. We use them offensively, since we are a market leader in a very small pond. People in the People's Republic of China sometimes knock off our products and we use it to fight that. We've litigated and threatened litigation in the PRC and been able to enforce there. We're doing some of that right now. DJ: Plantronics recently resolved an insurance dispute stemming from a 2006 class action suit brought against the company. Can you describe the case? Pickard: We and our two main competitors in the Bluetooth marketplace at that time, Motorola and GN Netcom, were sued alleging that Bluetooth headsets can cause noise-induced hearing loss. There's no science to support that and, frankly, there's no law to support that. So we settled the case basically for nuisance value. It was a very effectively litigated case. We used Mike Baumann at Kirkland & Ellis for that. Lewis & Llewellyn did the insurance coverage litigation emanating from that case. We were insured by AIG at the time and another insurance company that thereafter went into receivership. Our litigation was mainly against AIG. At the beginning of the case we had tendered the defense of the class action to AIG and said "we purchased insurance, it should cover the lawsuit, please pay for our defense." And they refused. The other insurance company brought a motion to dismiss right at the beginning of the case saying that Plantronics did not have a case. At that time, we were represented by Latham & Watkins, Mark Lewis and Paul Llewellyn were associates there at the time. We fought the motion to dismiss with Llewellyn doing most of the work. We asked the court to stay the insurance case until the class action suit was resolved. For various reasons, it took until 2013 for that to occur. Lewis and Llewellyn had left Latham to start their own firm and we kept them. They did a great job getting us a huge win. We received complete reimbursement for all of our legal fees. DJ: What other significant cases come to mind? Pickard: One of our main competitors, GN Netcom, purchased a distributor of Plantronics. We ended up terminating that distributor after the purchase, mainly because we give our distributors certain confidential information about marketing campaigns and new products. We didn't want that distributor to be a conduit to GN Netcom for confidential information. They ended up suing us, claiming that we terminated them because they were selling at lower prices than other distributors and that this was an antitrust violation. This was in Santa Clara County Superior Court around 2003. They black-boarded about $40 million in damages they were seeking from Plantronics. The jury sided with us. The distributor also owed us about $850,000 for product they purchased but had not paid for. The jury awarded that to Plantronics as well. We were defended by Tom Rosch and Peter Huston from Latham & Watkins. We ended up collecting around $3.7 million. DJ: Who do you work with for outside counsel? Pickard: Lewis & Llewellyn, obviously. They're handling some antitrust work for us right now. For general corporate work, we've used Wilson Sonsini from the time Plantronics went public a second time in 1994. The partners there are Katie Martin and Lisa Stimmell. I'm also defending yet another antitrust case that was brought by GN Netcom in 2012. That case is ongoing. Jonathan Jacobson in New York with Wilson is defending that case for us. I've used other Wilson attorneys for other work, primarily Mike Occhiolini and Erik Franks for a recent bond offering and a huge a stock buyback we did a few years ago. We use Baker & McKenzie for international law. I've known John McKenzie for about 35 years. Terrific lawyer. But we will also - with their blessing - look for local counsel on international issues. You want people that know the specific port houses and local laws. We also use Melinda Reichert at Morgan Lewis for employment law. I actually don't do immigration law, our HR department handles that. And I don't do tax. I will work with the tax department on setting up international offices, for example, or if there is threatened litigation over tax matters. But those departments handle most of their own legal matters. For IP litigation, we've been relying on the Valorem Law Group in Chicago with a partner in San Jose, Dave Bohrer.