(FORTUNE Magazine) – A planned pact between Marvell Technology Group and Jasmine Networks should be just a footnote in the annals of failed technology deals, except for one very unfortunate voicemail message.

Check out this saga: Jasmine, a startup in San Jose that makes telecommunications chips, had been in negotiations to sell its technology and a cadre of engineers to Marvell, a publicly held, more established competitor up the road in Sunnyvale. In early August, according to documents filed in Santa Clara County Superior Court in San Jose, three Marvell executives called Jasmine to complain about some procedural issues involving the deal. After leaving a lengthy message, Marvell's general counsel, Matthew Gloss, wrapped up the call, amiably saying "Bye-bye" and hanging up the phone.

Or so he thought. Gloss, who was sitting in an office with Kaushik Banerjee, a senior engineer, and Eric Janofsky, a Marvell patent attorney, apparently didn't disconnect the line; the executives' subsequent conversation about the deal is captured on the Jasmine lawyer's voicemail. From the tape, Jasmine alleges that Marvell improperly used information it obtained after signing a nondisclosure agreement, or NDA, with Jasmine. It also accuses Marvell of attempting to get information not included in the NDA by talking secretly with its engineers and wooing them with promises of big stock-option grants after the deal closed. According to Jasmine's interpretation of the voicemail filed in court documents, the Marvell executives wondered aloud if their engineers already incorporated Jasmine's technology--obtained by Marvell under NDA--into a Marvell chip. They also fretted that Marvell CEO Sehat Sutardja and Manuel Alba, vice president for business development, might go to jail as a result of these actions. More, the transcript details the executives discussing ways to prevent their alleged wrongdoing coming to light.

The transcript of the voicemail is filled with the jargon and the kind of clipped sentences used in everyday conversations. But these excerpts give a sense of the candor you'd hate for your adversaries to hear--let alone capture on tape:

Kaushik Banerjee (the engineer): Who do they think they're working with?

Matthew Gloss (the general counsel): They're f---ing amateurs.

Eric Janofsky (the patent lawyer): You gave me better news than I...

Gloss: Yeah, but you know the problem is so if they're dumping it into Tigo [presumably a code name for a Marvell chip], now that's a problem.

A few moments later...

Janofsky: No, if they gave it to us it is not a criminal problem.

Gloss: Yeah, but what did we induce, what did we solicit, what did we promise, what did we say?...

Janofsky: I don't think--it doesn't look--Sehat doesn't go to jail, obviously.

Gloss: Sehat doesn't go to jail. Manuel might go to jail; Manuel gets a black eye.

Gloss: Sure, a Marvell VP out there promising big option grants in proposed pending acquisitions if technology is transferred in advance...That's what's going on.

Janofsky: I don't see it going to a criminal level. I see it going to a severe civil, civil layer, but not...

Gloss: But still hits, would still hit the financial.

The deal never closed. Jasmine filed suit Sept. 12, accusing Marvell of trying to steal its trade secrets by raiding its engineers. The two sides have been duking it out in depositions, motions, and countermotions ever since. Marvell argues that the recorded conversation was privileged communication between lawyers, while Jasmine executives assert they are simply reporting apparent criminal activity. On Dec. 7 a judge agreed with Marvell, ruling that the transcript of the voicemail, which had been in the court files, should be sealed and cannot be used in court. (FORTUNE had obtained the transcript before this ruling.) A Jasmine lawyer says the company is considering an appeal, while George Hervey, Marvell's CFO, declined to comment on the specifics of the case.

The suit is potentially explosive for Marvell, which hasn't yet disclosed it to shareholders. (Hervey says he doesn't think the company has to.) Though not a household name, Marvell has remained a bona fide go-go stock, even during the recession. At a recent price of $37, it has risen 69% this year and is now worth about $4.3 billion. In contrast, the Philadelphia semiconductor index is down 1% since January.

It's certainly possible that Marvell executives were speaking hypothetically. If that's the case, then Jasmine's smoking voicemail isn't so red hot. "Lawyers discuss a lot of possibilities when advising clients," says Darin Snyder, a partner in the San Francisco office of O'Melveny & Myers and a veteran litigator of trade-secrets cases. "But it certainly raises suspicions."

The imbroglio gives rise to some incredibly simple advice: Next time you're on speakerphone with a potential adversary, make sure the line is disconnected before you start gabbing.